Federal Parent Loan for Undergraduate Students (PLUS)
Federal PLUS loans are for parents of dependent students enrolled in college. This loan provides additional funds for educational expenses. It allows a creditworthy parent or stepparent of dependent undergraduates to borrow up to the cost of attendance minus any other financial aid received. These loans are available through commercial lenders and are based on a borrower's credit history rather than financial need. The five lenders identified above (CFI, Inc., Sallie Mae, Key, Regions, and Sun Trust Banks) process PLUS loans for Shaw students. The interest rate on PLUS loans will be a fixed 8.5%. A 3% origination fee is deducted and an insurance fee of up to 1% may be deducted from the loan proceeds by the lender. PLUS loans do not require the FAFSA but it is strongly recommended that you complete it in order to be considered for other aid. Students and the parent borrowers must be U.S. citizens or permanent resident aliens and must not have an unresolved default or overpayment owed on Title IV educational loans or grants.
Repayment begins 60 days after final disbursement of the loan. The repayment term is generally based on a ten-year plan. Parents may pre-pay their loans in whole or part without penalty. Under certain circumstances, parents may consolidate their federal PLUS loans.
Master Promissory Note
The MPN is a legal document. By signing it, you promise to repay your PLUS Loans.
Your MPN is valid for 10 years from the date you sign it if a first disbursement on the note is made within one year of signing.
Changing a loan amount
A parent may choose to reduce or cancel the PLUS loan by
Accepting a lower amount than offered
Reducing it when the loan is approved
Requesting a return of funds to the lender within fourteen days of the time the funds are disbursed to the student's account if the student has not received a refund of a credit balance.
A request to change the loan should be made directly to the Office of Financial Aid in writing as soon as possible.
By federal regulations these loans are required to have two disbursements, one at the start of the loan period and one at the midpoint.
Accepting a PLUS Loan
All PLUS borrowers must receive a pre-approval from a lender before the aid office will certify the loan. The lender will notify the aid office of your pre-approval status.
If you have borrowed a PLUS previously, the lender will use the same MPN if you remain with the same lender. If your lender is not on the list, contact your lender directly.
If you are a new borrower, you will be lead through the following steps:
Review the lender benefits and incentives. Choose a lender. It is important to choose wisely; most parents have an account with their lenders for a minimum of 10 years; it is critical to remember your lender for subsequent years.
Complete a Pre-Approval Application and a Master Promissory Note.
A number of major lenders offer credit-worthy students and /or their parents the opportunity to borrow privately in order to meet educational costs not covered by their financial aid awards. In most cases a credit worthy co-signer is required unless the student has significant income. Some require a minimum of half-time enrollment and some require satisfactory academic progress. Families are encouraged to carefully review and consider the terms of any private loans prior to applying. It is important to remain with the same lender throughout your education, if possible. Shaw University requires that you receive pre-approval and complete the promissory note before the Financial Aid Office will certify your alternative loan. The Financial Aid Office will receive confirmation directly from the lender when you have been credit-approved. Again, all of the lenders listed above process alternative loans for credit worthy borrowers at Shaw University.
Federal Perkins Loan (Formerly the National Direct/Defense Student Loan - NDSL)
The Federal Perkins Loan is a federal loan administered by Shaw University to provide long-term (maximum ten-year repayment plan), low interest (5%) loan funds for education expenses to students with "exceptional financial need." No interest or repayment is required while the student is enrolled at least half-time in undergraduate or graduate school. Under this program, students may borrow up to $4,000 per year to finance their educational expenses. Loans generally range from $500 to $4,000 per year. Due to extremely limited funding, these federal loans are awarded to students with exceptional circumstance and need. Graduate/professional students may receive up to $4,000 per year to a maximum of $40,000 (including any Perkins money borrowed at the undergraduate level). The total amount borrowed cannot exceed $20,000 for undergraduate students. Repayment begins nine months after graduation or after the student ceases to be enrolled on at least a half-time basis.