The Federal Direct PLUS Loan Program provides loans to qualified parents of dependent undergraduate students who are enrolled at least half-time. The loan is not based on financial need. Parents can borrow up to the total cost of education minus any student financial aid received.
PLUS funds are sent directly to NIU. Any overpayments will be refunded to the parent by the Bursar's Office.
To apply for a Federal Direct PLUS Loan, your parent must complete a Federal Direct PLUS Loan Request Form and submit it to the Student Financial Aid Office (SFAO). By submitting this form, your parent is authorizing NIU to initiate an on-line credit check with the Department of Education. If approved, your parent will then receive a Master Promissory Note (MPN) from Federal Direct Loans. The completed and signed MPN must be returned to Federal Direct Loans electronically or by mail. If your parent is ineligible for the PLUS Loan due to adverse credit, you may consider taking out the Federal Direct Unsubsidized Stafford Student Loan. The option to request this student loan is included in the student section of the Federal Direct PLUS Loan Request Form. You may also choose to request this student loan at a later time by contacting the SFAO.
To maximize federal financial aid eligibility, NIU students are strongly encouraged to complete the Free Application for Federal Student Aid (FAFSA) online at www.fafsa.ed.gov.
For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed at 7.90 for Direct PLUS Loans. For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July 1 of every year. For 2007-2008, the variable rate for these PLUS Loans is 8.02 percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.
Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they don’t make their loan payments when scheduled.
Generally, the first payment is due within 60 days after the loan is fully disbursed. There is no grace period for these loans. Interest begins to accumulate at the time the first disbursement is made. Your parents must begin repaying both principal and interest while you're in school. Contact the Direct Loan Servicing Center for repayment options at www.dl.ed.gov.
They'll repay their Direct PLUS Loan to the U.S. Department of Education's Direct Loan Servicing Center. To read more about repayment options read the PLUS Loans section for Direct Lending in Funding Education Beyond High School: The Guide to Federal Student Aid.