UCSC Financial Aid - Federal Parent Loans (PLUS)

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FAFSA School Code 001321

Federal Parent Loans for Undergraduate Students (PLUS)

Federal PLUS loans are long-term loans borrowed directly from the federal government. Parents may borrow up to the full cost of attendance, as defined by the UCSC Financial Aid Office, less any financial assistance the student receives. Parents must demonstrate creditworthiness for loan approval. PLUS Loan Basics is a brochure that provides more information about this loan.

Calculate your PLUS loan eligibility:

Total budget (cost of attendance on your Student Portal)
- Total student aid (loans, grants, scholarships, etc.)
= PLUS eligibility for the academic year.

NOTE: If a loan amount is not specified on the application, the loan will be processed for the student's maximum eligibility.

Federal Parent Loan Terms and Eligibility Criteria

Qualifications	Available to Undergraduates?	Available to Graduates?	Must Demonstrate Financial Need?
	Yes	Yes (See Grad PLUS)	No
	Parents of dependent students may borrow up to the full cost of education, as defined by the UCSC Financial Aid Office, less any financial assistance the student receives. Parents must demonstrate creditworthiness for loan approval. A dependent student is one who does not meet any of the criteria for an independent student. If your child does NOT meet any of these criteria, you may apply for a Direct PLUS Loan for him or her.
Interest	The interest rate is 7.9 % fixed for loans received on or after July 1, 2006. Interest accrues from the date you receive loan payments. It is possible to defer repayment until after the student graduates or enrolls less than half time.
Fees	Combined origination and insurance fees: 4% less an up front interest rebate of 1.5% results in a net up front deduction of 2.5%. Fees are deducted from the loan amount.
Repayment	The repayment period is calculated from the day after the loan is fully disbursed (Usually around the beginning of April). Your first payment is due within 60 days after the final loan disbursement. Prior to the official repayment start date it is not necessary to repay principle however interest on the disbursed loan amount will be charged. You can either pay the interest quarterly or add it to your loan balance, increasing the principal upon which future interest will be calculated, thus increasing the amount you'll repay.

Federal Parent Loan Application Process
Step 1: Aid Application	The student submits a Free Application for Federal Student Aid (FAFSA) listing UCSC (school code = 001321).
Step 2a: Application Form	The parent must submit a completed Parent Loan for Undergraduate Students(PLUS) Application. If a loan amount is not specified on the application, the loan will be processed for the student's maximum eligibility.
Step 2b: Credit Check	No action is required on the part of the borrower for this step. The PLUS loan application will be processed by the UC Santa Cruz Financial Aid Office and transmitted to the U. S. Department of Education Direct Loan Servicing Center for credit check and approval. Results of the credit check (approval/denial) will be mailed directly to the parent applicant.
Step 3: Master Promissory Note	The first time the parent applicant is approved, he/she must complete a Master Promissory Note in order for PLUS funds to be disbursed. This promissory note is valid for future loans borrowed on behalf of the same student for up to 10 years. If denied, the parent may pursue a co-signer. Contact the Department of Education for details at 1-800-433-3243 or see http://www.ed.gov/Direct Loan/ for assistance. The Department of Education will send notification to UCSC that the electronic Master Promissory Note has been completed and accepted.
Disbursement of Funds	Funds are credited to the student’s UCSC billing account. Any PLUS funds remaining after UCSC charges are paid will be given to the student or parent depending on which box is checked in question #9 on the PLUS Application. Changes to the recipient of refunds cannot be made after the loan has been processed. Note: If the student is on an Education Abroad Program (EAP), the funds will always go to the parent.
Step 4: Permanent Address	The student must update his/her permanent address on the MyUCSC student portal. The permanent address must be set to “active” before the loan will disburse.
Step 5 (optional): Direct Deposit	The student can sign up for Direct Deposit/Electronic Funds Transfer (EFT) for a quicker refund. (Recommended, but not required).