Southern Vermont College Alternative Financing
DIRECT FEDERAL PARENT LOAN FOR UNDERGRADUATE STUDENTS (PLUS LOAN)
NOTE: Before applying for a PLUS loan, the student must complete a FAFSA at www.fafsa.ed.gov and be eligible for federal financial aid. The student must also be enrolled and participating in 6 degree-applicable credit hours for the parent to borrow this loan and receive disbursements.
Facts you as a parent should know:
• PLUS loans can be borrowed to pay for your DEPENDENT student’s educational expenses.
• A credit check will need to be completed with the US Department of Education. Applicants who do not receive credit approval may be able to receive the loan if they obtain an endorser (someone who promises to repay the loan if you do not make payments according to the terms of the loan).
• Borrowers must meet the citizenship requirements and not be in default or owe a repayment to the Federal Student Aid Program.
• The amount a parent can request for an academic year is determined by taking the Cost of Attendance and subtracting the student’s financial aid award.
• Loan funds are applied to the student’s account to pay any balance outstanding at the time of the disbursement. Any remaining funds not use to pay a balance are refunded.
• The interest rate on the PLUS loan is fixed at 7.9%. Interest begins accruing with the first disbursement of funds.
• There is an origination fee deducted from each disbursement of the loan to help reduce the cost of the loans. The fee is currently 4% minus a 1.5% rebate. Once you begin repayment, you must make 12 on-time payments to retain this benefit.
• Standard repayment begins within 60 days after the final loan disbursement for the period of enrollment of the loan. Parents also have the option to request a deferment of repayment while the student is enrolled at least half time.
• A parent can request a deferment; call the Direct Loan Servicing Center at 1-800-848-0979. Deferments will not be approved until the first loan disbursement has been made.
Alternative Student Loans/Private College Loans
An Alternative loan is a private loan separate from any federal loans the student may already be borrowing. Students are encouraged to exhaust all federal student loans offered to them prior to using an Alternative/Private loan. The annual loan maximum would be the total Cost of Attendance minus the offered financial aid. It is up to the student to apply for the loan and work with the loan company to be approved. Please note that the student may need a cosigner. Once the loan has been fully approved, the loan company will contact SVC's Financial Aid Office, where the loan will be certified for up to as much as the student is eligible to receive (Cost of Attendance minus financial aid being received).
SUGGESTED LENDER LIST
Other SVC Financial Aid Information
- Aid Application Process
- SVC Financial Aid Forms
- Institutional Scholarships and Grants
- Federal Direct Stafford Loans
- Resources/Helpful Links
- Financial Aid Refund Calculations
- Support from the Financial Aid Office
- Financing Your SVC Education
- Quick Facts
Thomas Redden, Ph.D. - Professor, The Donald Everett Axinn Division of Social Sciences.
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