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Parent PLUS loans: how long does application take?

cgpm59cgpm59 Posts: 351Registered User Member
Trying to decide between two schools; both have offered some loans and grants, and we are waiting on smaller local scholarships, which won't be awarded until later in the spring. DS was offered the sub and unsub loans, which he will take.

I'm looking at whether to apply for a PLUS loan to cover the remainder; how long does it take after you apply for a PLUS loan to find out if you are approved? And how do you know how much to apply for? One school's award letter specifically gave the max amount that we could apply for, but I don't think the other one did. And then if you do get some of the various scholarships, would that reduce the amount of your PLUS loan?

Or is a PLUS loan more like a line of credit in that you apply for the max amount, but then you can only use it if you need to?? You might be approved for $5 million but, after all is said and done, you really only need to use $3.5 million . . . that's a joke, but an example. :)
Post edited by cgpm59 on

Replies to: Parent PLUS loans: how long does application take?

  • SLUMOMSLUMOM Posts: 3,610Registered User Senior Member
    I had talked to a parent during last admission cycle who went to FAFSA website with his PIN he applied for to do the PLUS Loan and he told me he knew immediately after he submitted it online! So it must tie your social security number into one of the Experian, (credit bureaus) etc to get your credit info.

    So you must know after you submit it! Other than that, I really don't know very much about PLUS Loans and you need to apply for a PIN through PLUS in order to apply on the FAFSA website. I am sure other posters will post more information.
  • kelsmomkelsmom Posts: 12,570Super Moderator Senior Member
    Not all schools accept the online PLUS application. You have to check with the school. Many do not begin processing the PLUS loan credit checks until summer. You have to do what the school wants. Paper applications with a "wet" parent signature are still preferred by some schools.

    Many of our parents who were sure they would be denied a PLUS were approved this year. The credit check doesn't seem to be too stringent ... I think it's a 60 day check.
  • cptofthehousecptofthehouse Posts: 25,103Registered User Senior Member
    I've applied for PLUS for 3 colleges and each one had different procedures. For the first two, I did not even need to complete a FAFSA. This year for the third child, it took the longest to get everything done.

    So if the school requires a FAFSA (and I've also been told that all school will be requiring one for PLUS now), you have to get that submitted first.
  • cptofthehousecptofthehouse Posts: 25,103Registered User Senior Member
    I want to add that you can ask to borrow the maximum allowable amount without putting in a dollar figure, if that is what you want, but I believe there is an origination fee that is based on how much you borrow. Remember that repayment starts within a few months after you get the funds.
  • kelsmomkelsmom Posts: 12,570Super Moderator Senior Member
    Yes, the FAFSA is required now for PLUS loans. That's a new regulation this year.

    The origination fee ends up being 2.5%. I don't think it's scheduled to change for 11-12.
  • cgpm59cgpm59 Posts: 351Registered User Member
    Thanks, everyone. Yes, we've already done the FAFSA and both of these schools accept the online PLUS application. Guess we'll see how this goes!
  • milkandsugarmilkandsugar Posts: 2,869Registered User Senior Member
    The school will give you instructions on how to secure the PLUS loan. The amount is usually whatever gap is not covered by scholarships and fed loans and grants. But it is never more than what the COA is minus any fed loans,grants and school scholarships.
    BTW, there are several different repayment options and one of them includes deferring it while your child is in school at least half-time.
    And you can opt to only take a different amount than is offered.
  • DebrunsDebruns Posts: 2,725Registered User Senior Member
    I remember 3 years ago, it was done pretty quickly and the school notified. I was able to do it online. I did have the choice and declined of defering paying or just paying on the interest like a stafford loan but just started paying when it was dispensed. I used Salliemae one year and a NJClass when my son was in a NJ college (lower rates at the time)

    I was going to take a small one this coming Fall but decided, with my twins, for them to take the full stafford loans and take advantage of the low rates (3.40% and 6.8%) compared to the rates for my loan. I will pay them online as I have done in the past and hopefully have them paid off by the time they graduate.
  • cgpm59cgpm59 Posts: 351Registered User Member
    One more question: DS has not decided yet on which of the two schools he will attend. After reading the various replies, it sounds like we need to wait until he makes his decision before we apply for a PLUS loan, right? Both schools used the FAFSA and both say you can apply online for PLUS. But it sounds like we should only apply for the ONE school that he will attend. At least it sounds like the approval for the PLUS comes very quickly, and you don't have to take the full amount if you decide not to.
  • kelsmomkelsmom Posts: 12,570Super Moderator Senior Member
    I definitely suggest waiting until the school is decided upon ... you will have plenty of time for processing.
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