The Federal PLUS Loan, along with Stafford Loans, are part of a group of loan programs referred to as the Federal Family Education Loan Program (FFELP). PLUS loans were originally created and continue to serve as a federally sponsored loan for parents of students attending college (thus the acronym – PLUS - Parent Loan for Undergraduate Students). However, PLUS loans are now available to graduate and professional students.

Graduate students can borrow PLUS to supplement the subsidized and unsubsidized Federal Stafford Loans that are currently available. Student borrowers are still encouraged to first borrow the maximum (based on eligibility and determination of need) in Stafford Loans before borrowing the PLUS

A lender like EFSI, banks, credit unions, savings and loan associations, other lending institutions that participate in FFELP, or in rare cases, the school itself can actually make the loan. A guarantor, a state agency or non-profit corporation, insures the loan, which means you can make the loan just on your signature. The guarantor may charge a fee for this insurance.

This loan was first created specifically for parents of students after high school and has many benefits not ordinarily found in credit cards or other loan products. PLUS loans offer an alternative for parents and now graduate and professional students whose financial resources are insufficient to cover anticipated education costs. The PLUS loan permits parents of undergraduate students (Parent PLUS) and graduate and professional students (GradPLUS) to borrow up to the cost of education each year less any other financial aid the student may receive.

You choose the lender. Keep in mind that this is the beginning of a long-term relationship. It is a good idea to use the same lender for all of your education loan needs.

Please note that financial need and family income are not considered for acceptance for this loan. As a result, many borrowers who may not be eligible for other federal loans can typically qualify for a PLUS loan. In addition, graduate and professional students who have exhausted all their Stafford options can now qualify for GradPLUS. The lender is, however, required to review your credit history before approving the loan.

Students should always apply for a Stafford Loan first, since the amount of a PLUS loan could reduce the amount he or she can borrow under the Stafford Loan Program. The terms on a Stafford Loan are better than the PLUS Loan and only in the student's name.

There are no annual or cumulative limits as with the student loan, but the total of the Federal PLUS loan combined with any other financial assistance you receive cannot exceed the cost of attendance as determined by the school less any other financial aid the student may receive.

APPLICATION PROCESS:
Apply Online or print, complete and mail a Parent PLUS preapproval application.

OBTAINING YOUR LOAN MONEY
Normally, loans are disbursed in two equal disbursements, at the beginning and middle of the academic period. Schools disburse PLUS Loans in one of two ways:

1. Electronic funds transfer (EFT), which allows your lender to transfer your money directly to a school's bank account and subsequently to your student account.
2. Paper check made payable to you and your school and sent directly to the school for endorsement.