What is a PLUS Loan?

COCC participates in the William D Ford Federal Direct Loan program.  The Parent Loan for Undergraduate Student (PLUS) loans are included under the Direct Loan program.  PLUS loans enable parents, stepparents, or adoptive parents of a dependent undergraduate student to borrow money to supplement their child's college expenses.  Direct Loans are borrowed directly from the federal government and have a signle contact for everything related to the repayment of the loans.  Many families find PLUS loans an attractive alternative to using lifetime savings or investments for educational expenses.

Who is Eligible?

Parents, stepparents, and adoptive parents of dependent undergraduate students attending school at least half-time are eligible to apply for a PLUS loan.  For financial aid purposes, a student is considered dependent if the student is under 24, unmarried and has no legal dependent at the time the FAFSA is submitted.  These loans are not based on the family's income or assets.  A credit report from a national credit bureau by the lender will be obtained to determine if the parent will be eligible.  Parent must be US citizens or eligible non-citizens.  Parent must be credit worthy which means that the parent borrower must not have any outstanding tax liens, judgements, delinquent, defaulted loans, extensive credit card debt, any bankruptcy, foreclosure, or wage garnishment with in the past five years.  For more information regarding eligibility requirements, visit the Department of Education's PLUS loan web site.  COCC requires that students submit a complete Free Application for Federal Student Aid (FAFSA) prior to the parent borrower applying for a PLUS loan.

If the borrower is not eligible for the PLUS loan, the student may be eligible for an additional Unsubsidized Direct Loan.  Additional information is available at the Financial Aid Office. 

Interest Rates and Fees

Interest is charged on the Direct PLUS Loans during all periods, beginning on the date of the loans first disbursement is made until the loan is paid in full.  In addition to the interest, there will be a loan origination fee that is a percentage of the principal amount of each Direct PLUS Loan that is received.  This fee helps reduce the cost of making these low-interest loans.  This origination fee is deducted before the money is received by the school, so the loan amount actually received will be less than the amount that will have to be repaid.

 
How much can I borrow?

The maximum eligibility (yearly limit) on a PLUS Loan is equal to the student’s cost of attendance budget minus any other financial aid the student receives.  Funds are available based on enrollment in a minimum of 6 credits per term. 

For example:
Sally will be attending COCC for the Fall, Winter, Spring terms.  She has decided to live with her parent while she attends school.  Her cost of attendance budget totals $9,312 and COCC can only offer Sally a subsidized loan for $3,500.  The loan will not be enough to cover tuition, fees, charges, and education expenses.  So Sally's parent(s) decide to apply for a PLUS loan.  The parent(s) will be able to apply for a $5,812 PLUS loan.
(This example is for demonstration purposes only.  Each parent(s) PLUS loan will differ due to the student individual circumstances.  If you have concerns or question, contact the Financial Aid Office.) 

Disbursement

The loan funds will be sent to the school by the Department of Education and will be used to pay for tuition, fees, room, board, and other authorized charges.  Disbursement dates will coincide with dates that are specified by the school and cannot be requested prior to regularly scheduled disbursement dates.  For disbursement dates please view the 'Term Disbursement Information'  located on our web site. 

If any loan money remain, the parent will receive the amount as a check, unless they authorize the remaining money to be released to the student.  Any remaining loan money must be used for the education expenses of the student.

Repayment

There is no grace period for Direct PLUS Loans.  The repayment period for each Direct PLUS Loan received begins 60 days after the school makes the last disbursement of the loan.  This means that interest begins to accumulate at the time the first disbursement is made to the College. Parents must begin repaying both principal and interest while the student is in school.  Visit the Department of Education PLUS Loan web site for deferments and repayment options.

Click here for a quick reference guide on choosing a student/parent loan.