Rates, Fees and Terms
Rates
Federal PLUS Loan rates start at just 8.5%. Plus, you can shave another 0.25% off your rate if you have your payments automatically deducted from your bank account, and another 2.0% after making your first 48 consecutive on-time payments. This means your rate could be as low as 6.25%.
Federal PLUS Loan interest rates are variable and adjusted July 1 of each year, based on the last 91-Day T-Bill auction rate in May.
Borrowers pay the rate on that 91-day T-Bill + 3.1%.
The interest rate is capped at 9% for the borrower for the life of the loan.
Fees
The Federal PLUS Loan has a 3% government origination fee and a 1% guarantee fee (which may be waived by the guarantor). Fees are taken out of the proceeds of the loan, so there is no out-of-pocket cost to obtain the loan.
Terms
With a total outstanding balance of over $10,500, a parent may choose to consolidate PLUS Loans immediately to extend the repayment term and reduce monthly payments. Other federal education loans borrowed in the parent’s name can be consolidated with the PLUS Loan for payment convenience.
Otherwise:
The repayment term is usually 10 years.
Repayment begins 30 to 60 days after the final disbursement is made. Since funds are disbursed at the beginning of each semester, repayment typically begins in March.
There are no penalties for prepayment.
Under certain hardship circumstances, alternate repayment options such as Deferment, Forbearance, and Income-sensitive repayment may be used to reduce or postpone repayment.
All PLUS debt is forgiven in the event of death or total and permanent disability of the borrower or death of the student.
Or call us toll-free at (800) 299-4639
Quick Links
» Getting a Federal PLUS Loan
» Qualifying for a Federal PLUS Loan
» There are more savings available
» Treat the loan as your child's debt
For more information about NextStudent, visit www.NextStudent.com.
|