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Parent Loan for Undergraduate Students (PLUS) Loan
Parents may borrow under the Federal Parent Loan for Undergraduate Students
(PLUS) on behalf of their dependent children. The PLUS loan maximum is
the difference between the cost of education and any estimated financial
assistance the student may be receiving. The parent is the borrower under
this program and the check is made co-payable to the parent and the school.
Like the Federal Stafford Loan program, PLUS loans are issued in multiple
disbursements and paid once each semester. The loan check or Electronic
Funds Transfer (EFT) of funds will be sent directly to the school by the
lender. The interest rate is fixed at 8.5%.
Repayment of the PLUS loan begins within 60 days of the final disbursement
of that loan. BND offers a variety of payment options for PLUS borrowers. If the loan does not qualify for deferment while the student is in school, we offer a variety of payment alternatives. We can set them up on a no-payment schedule, a lower monthly payment, or we will allow them to make interest-only payments. If the borrower chooses the interest-only option and does not pay the full amount of interest that accrues, any remaining amount is capitalized at the end of the interest-only period.
Once approved for the PLUS loan, the parent should contact BND to determine the payment option which best suits their needs, as BND offers PLUS borrowers a number of payment options to choose from, including a standard, graduated, income-sensitive, or extended repayment schedule depending upon their individual circumstances. The PLUS loan borrower may also qualify for a .25% interest rate reduction
when utilizing an automatic payment option.
The Fact Sheet illustrates more information about Federal PLUS loan.
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