Loans
Federal Direct Parent PLUS Loan
The Federal Direct Parent PLUS Loan enables parents of dependent students to receive funds directly from the U.S. Department of Education. As in the case of other Direct Loans, the Department is the lender rather than a bank, and loan proceeds are delivered through UW-Eau Claire. For loans disbursed prior to July 1, 2006 the interest rate is variable and is adjusted each year. It will never exceed 9 percent. For loans disbursed on or after July 1, 2006 the interest rate is fixed at 7.9%. Like the Unsubsidized William D. Ford Federal Direct Loan, the interest begins to accumulate on the date of the first loan disbursement.
Parents may borrow up to the amount of their child's educational costs (as set by the Financial Aid Office) minus any other financial aid he or she may receive. Financial need is not considered when determining eligibility.
The repayment period begins on the day after the loan is fully disbursed. The first payment will be due within 60 days after the final loan disbursement. The parent borrower is required to pay both principal and the interest that accumulates.
For Parent PLUS loans that are first disbursed on or after July 1, 2008, Parent PLUS loan borrowers have the option of beginning repayment on the Parent PLUS loan either 60 days after the loan is fully disbursed or not until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled at least a half time basis.
Parent PLUS borrowers can call Direct Loan Borrower Services at 1-800-848-0979 to request an in-school deferment for their dependent child. This change is only for Parent PLUS loans that are first disbursed on or after July 1, 2008. Parents should wait until the first disbursement of the loan occurs before making this call. Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.
A dependent student is one who does not meet any of the criteria for an independent student. An independent student, according to federal definition, must meet at least one of the following criteria:
Independent Student Definition
- at least 24 years of age
- married
- a graduate student
- veteran
- orphan
- ward of the court
- someone with legal dependents other than a spouse
If your child does NOT meet any of these criteria, you may apply for a Direct Parent PLUS Loan for him or her.
