2016-2017 Walden University Student Handbook (March 2017) 
    
    Jun 26, 2022  
2016-2017 Walden University Student Handbook (March 2017) [ARCHIVED CATALOG]

Federal Direct Parent Loans for Undergraduate Students (PLUS) Loans


Return to: Federal Programs  

Federal PLUS Loans are available to all parents of dependent undergraduate students regardless of income. Qualification is based solely on good credit. There are no debt-to-income ratio guidelines or employment verification requirements. Parents may borrow up to the total education cost for the year, minus any other financial aid that the student is receiving. The total education cost can include tuition and fees, room and board, books and supplies, transportation, and living allowance.

The interest rate for Parent PLUS loans disbursed on or after July 1, 2016 through June 30, 2017 is fixed at 6.31%, with interest beginning to accrue upon disbursement until it is repaid in full.

Federal Direct Parent PLUS loans first disbursed on or after October 1, 2015 and before October 1, 2016 have a 4.272% loan fee.

PLUS loan repayment normally begins within 60 calendar days after the loan has been fully disbursed. In certain circumstances, parents may elect to repay the loan on a graduated repayment schedule, making interest-only payments (the minimum amount is based on the term of the loan and must be at least $50 per month) for a portion of the repayment term.

Process for Students

  • You complete the Free Application for Federal Student Aid (FAFSA) at http://www.fafsa.gov/ if one has not been submitted for the current year.
  • The parent completes the Parent PLUS Loan Request and Parent PLUS Master Promissory Note (MPN), and you complete undergraduate-level Direct Loan Entrance Counseling. All forms are available online at http://www.studentloans.gov/.
  • The Office of Financial Aid receives the Direct Parent PLUS MPN and the approved/endorsed Parent PLUS Loan Record from the U.S. Department of Education and adds the Parent PLUS award to myFinAid.
  • You go to myFinAid to accept, reduce, or decline the Parent PLUS award amount.
  • If you are registered and all official transcripts are on file with the Office of Admissions, the Office of Financial Aid sends a Direct Parent PLUS Loan origination record to the Department of Education.

Decisions

The Department of Education is responsible for all Parent PLUS Loan credit decisions. Parent PLUS Loan borrowers are required to pass a simplified credit check, meaning that the Department of Education is not looking for a certain credit score or for an extensive credit history but simply the absence of an adverse credit history. You can view the status of your parents’ application by logging in to www.studentloans.gov or by calling Federal Direct Loans at 1-800-848-0979.

The following will cause a Parent PLUS Loan to be denied:

  • A current delinquency of 90 days or more; this includes unpaid collection accounts and charge-offs.
  • Default in the past 5 years.
  • Defaulted loan that has been claim paid.
  • Chapter 7, 11, or 12 bankruptcy (Chapter 13 is OK) in the past 5 years.
  • Discharge in the past 5 years.
  • Foreclosure in the past 5 years.
  • Foreclosure proceedings started.
  • Deed in lieu of foreclosure.
  • Lease or contract terminated by default.
  • Repossession in the past 5 years.
  • Tax lien (county, state, or federal) in the past 5 years.
  • Wage garnishment in the past 5 years.
  • Voluntary surrender in the past 5 years.
  • Write-off of Title IV debt in the past 5 years.

Parents will receive an immediate approval or denial of their application upon electronic completion as well as the loan reference number, which is needed if the parent wishes to pursue an endorser. The Walden University Office of Financial Aid will be notified electronically of the credit decision only if the application was completed electronically. Applications are not approved or denied based on the dollar amount requested; therefore, parents should not complete additional applications once a denial is rendered by the Department of Education. Effective March 29th, 2015 credit decisions are held for 180 days. Once the loan application is denied, the parent must either find an endorser or appeal the credit decision.

The Office of Financial Aid has no control over or influence on the credit decision rendered by the Department of Education. Any and all correspondence regarding credit appeals and endorsers must be sent to the Department of Education.

Approval for the Parent PLUS loan is loan specific. It is possible to be approved for one loan and denied at a later date for a new loan. Denied parents still have two options to obtain the Parent PLUS Loan:

  1. Review their credit report (which can be done for free at http://www.annualcreditreport.com/) for possible errors and correct them before appealing directly to the Department of Education.
  2. Find a credit-worthy endorser to co-sign for the loan. This endorser will then be responsible for the loan should the parent default on it at any point during the life of the loan. 

Endorsing a Parent PLUS Loan

Steps to be taken by the endorser (parent)—These MUST be completed electronically; paper addenda will not be accepted:

  1. Sign up for a Federal Student Aid (FSA) ID at https://fsaid.ed.gov/npas/index.htm. A FSA ID is required to electronically sign the endorser addendum.
  2. Sign on to http://www.studentloans.gov/. This is the website where the endorser electronically co-signs the loan.
  3. Click on “Endorse Direct PLUS Loan” (fourth link down, in the center of the page).
  4. Enter the Loan Reference Number (provided by parent borrower) and follow the instructions.
  5. Accept or reduce the Parent PLUS Loan amount. This will need to be done prior to the record being sent for certification.

Disbursement

Disbursement of funds is usually done in three equal amounts at the beginning of each semester/quarter and sent directly to the university. A federal loan fee may be deducted from the proceeds.

Repayment

PLUS loan repayment normally begins within 60 calendar days after the loan has been fully disbursed. In certain circumstances, parents may elect to repay the loan on a graduated repayment schedule, making interest-only payments (minimum is based on term of the loan, but at least $50 per month) for a portion of the repayment term.