Occasionally, the financial aid offered to a student isn't enough, and families may need to look at additional help in order to afford the overall cost of higher education. If this is the case, we have a couple different loan options: Parent (PLUS) Loans and Private/Alternative Loans. If you have any questions you may contact Chrislin Wilder at (916) 577-2234 or cwilder [at] jessup [dot] edu.
Parent (PLUS) Loans
The Parent Loan for Undergraduate Students (PLUS) is a federal loan, funded by the lender of your choice with flexible repayment options. Parents of dependent students may borrow up to the full annual cost of education, minus any other financial aid.
Current interest on this loan is fixed at 7.9%. You may be able to receive interest rate reductions during your repayment status per your lender's benefits.
There are two fees charged to the PLUS loan for each disbursement made: a 3% Origination Fee and a 1% Federal Default Fee. Please request the appropriate amount, which includes these two fees. For example, if your remaining balance is $1,500 (the net amount after fees) you will need to request a PLUS loan for $1,563 (the gross amount). You can arrive at the proper gross amount by dividing your net amount by .96. In the example above, that would be $1,500 / .96 = $1,562.50 (round up to the nearest dollar).
Repayment begins 60 days after the funds are fully disbursed, and the repayment term is up to 10 years. Parents can defer payments on the Parent PLUS loan while the undergraduate student on whose behalf they borrowed the PLUS Loan is in school and for a six month grace period after the student graduates or drops below full time enrollment. Because the interest on the PLUS loan is not subsidized, it continues to accrue while deferred and is capitalized when the loan enters repayment.
Eligibility for the PLUS loan depends on a modest credit check that determines whether the parent has an adverse credit history. An adverse credit history is defined as being 90 or more days late on any debt or having any Title IV debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off. The Ensuring Continued Access to Student Loans Act of 2008 extended the 90 days late threshold to 180 days for mortgage payments and medical bill payments during calendar years of 2007 through 2009.
What if I'm denied the PLUS loan?: If a dependent student's parent is denied a PLUS loan, the student becomes eligible for an additional Unsubsidized Stafford Loan. Only one parent needs to apply for and be denied a PLUS loan. However, if one parent is denied a PLUS and the other is approved for a PLUS loan, that student is not eligible for the additional Unsubsidized loan.
WE ARE WORKING ON TRANSITIONING OUR ONLINE PLUS LOAN PROCESS TO COMPLY WITH THE DIRECT LENDING PROGRAM.
ACCESS TO COMPLETE PLUS LOAN ENTRANCE COUNSELING AND THE ONLINE PLUS MPN ARE TEMPORARILY UNAVAILABLE. WE APOLOGIZE FOR THE INCONVENIENCE AND HOPE TO HAVE THIS ACCESS RESTORED BY MONDAY, MARCH 29.
Private/Alternative Loans
Private loans are offered to students by private lenders and require a separate application for each one. Recent legislation has made the private loan process more time consuming and paper-intensive. You will be required to fill out a self-certification form for you loan which lists the Cost of Attendance less all of your other Financial Aid. Please bring this form to the Financial Aid Office to be completed on your behalf.
Private student loans typically have variable interest rates, with the interest rate pegged to an index, such as LIBOR or PRIME, plus a margin.
Eligibility for private student loans always depends on the credit score of the student. The interest rates and fees you pay are based on your credit score and the credit score of your cosigner, if any. Generally, if your credit score is less than 650 (FICO), you are unlikely to be approved for a private student loan. An increase of just 30 or 50 points in your credit score is often enough to get you better terms on your loan.
It is usually better to apply for a private student loan with a co-signer even if you could qualify for the loan on your own. Applying with a co-signer usually results in a slightly lower rate, as such loans are not as risky for the lender. Moreoever, the interest rates and fees are usually based on the higher of the two credit scores. Therefore, if your co-signer has a much better credit score than you, it could result in a much lower interest rate. If you have no credity history, you will need to apply with a co-signer.
As a general rule, students should only consider obtaining a private education loan if they have maximized all Federal Stafford Loan options.
Repayment for these priviate loans are 6 months after the student graduates or is no longer enrolled at least half time (6 units). Interest does accrue during the time the student is enrolled and is added into the balance of the loan at repayment.
For more information, please contact Chrislin Wilder at 916-577-2234 or cwilder [at] jessup [dot] edu.
For a visual breakdown of Additional Loan Options, please click on the following link.
