JCC DIRECT PARENT PLUS LOAN Frequently Asked Questions (FAQs)

A parent borrowing on behalf of a JCC student has access to Federal Parent PLUS loans from the U.S. Department of Education’s William D. Ford Direct Loan Program. Loan funds are forwarded to the college from the U.S. Department of Education (DOE) and are repaid to the Direct Loan Servicing Center.

 To apply for a Direct Parent PLUS Loan at JCC you must:

1. Complete your student's annual FAFSA (Free Application for Federal Student Aid) at fafsa.gov. Federal regulations require the college to verify that the student who will benefit from your PLUS loan is eligible to receive Title IV federal financial aid. The FAFSA Student Aid Report is required to confirm that your child meets student eligibility criteria.
2. If your student's FAFSA is selected for Verification, that process must completed before a JCC Financial Aid Award Notification can be issued with the kind and amount of aid your child is eligible to receive.  We recommend you wait to receive the Award Notification so that you can make informed decisions about your PLUS loan needs.
3. Apply for a Direct Parent PLUS loan on-line at StudentLoans.gov. Please apply by June 1st to ensure timely processing for fall semester student bills. Applications for students entering college in the spring semester should be submitted by December 1st.  If you determine that you do not need a loan,  but  circumstances change later in the year, please allow a minimum of 6-8 weeks for approval and delivery of your loan funds.
4. JCC will receive electronic confirmation of your loan application status, and will notify you of your final loan approval.

Who can apply? Either biological or adoptive parent (or a step-parent listed on the FAFSA) can apply for a PLUS loan for a dependent child enrolled in at least 6 credit hours. Parent borrowers must have a good credit history, not be in default on a Federal student loan, or owe a refund on any Federal grant money. In addition, you and your child must be US citizens or eligible noncitizens and must meet other general eligibility requirements for the Federal Student Aid programs.

What is a Master Promissory Note? You must sign this binding legal document to borrow a Federal Direct PLUS Loan. It lists the conditions under which you are borrowing and the terms under which you agree to pay repay the loan. It will include information about your interest rate and about deferment and cancellation provisions. Typically the MPN is valid for 10 years, so if you previously borrowed a Direct PLUS Loan for this student, you may not need to sign a new one. You will complete the MPN at StudentLoans.gov during the on-line application process. You can cancel your loan even after signing your MPN by notifying our office.

What about interest and fees? The interest rate for a Federal Direct PLUS Loan is currently a fixed rate of 7.9%. Interest accrues on the loan beginning with the date of your first loan disbursement. A 4% origination processing fee will be charged on the principal amount of the loan, deducted before any funds are received, so the loan amount you receive will be less than the amount that will be repaid. The DOE offers a 1.5% rebate on the fee, so the net amount charged will be 2.5%. You can keep the rebate provided you make the first 12 required monthly payments on time.

How much can I borrow? The yearly limit on a PLUS loan is equal to the student’s cost of attendance less other financial aid received. JCC offers an optional loan need worksheet that can help you determine your student's needs. It will walk you through estimating the student’s direct and indirect expenses to calculate how much you might need to borrow. Remember that you might need to request a slightly higher amount because of the origination processing fee.

How will I receive this money? After approval, loan funds be temporarily applied to you student's college bill.  Funds will be disburse and applied toward your student’s bill in two (2) equal installments, one at the beginning of the loan term and one at the midpoint of the loan period (typically the beginning of each semester). Your student can view his/her student account at https://banner.sunyjcc.edu.  You will be notified in writing when the college receives your loan funds, after classes begin. After funds are received, the JCC business office will issue any refund in excess of student charges within 14 days via US mail. This refund will be issued in the name of the parent borrower unless you indicate otherwise with your online application.

What if I’m denied? If your loan is denied due to adverse credit, you will receive further instructions from the Department of Education. You may choose to rehabilitate your credit standing or re-apply with an endorser (co-signer). Your student may be eligible for up to $4,000 additional unsubsidized Stafford loan funds if your PLUS loan is denied. Please contact the JCC Financial Aid Office at (716) 338-1009 for more information.

What is NSLDS?
Federal regulations require that information regarding your loan, including amounts, be submitted to the National Student Loan Data System (NSLDS). This loan information will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system. You can access your NSLDS information with your Department of Education issued PIN.

What about Loan Repayment? Parent PLUS loan borrowers enter repayment 60 days after the loan has been fully disbursed. The monthly payment is based on how much you borrowed and the length of your repayment period. You can change repayment plans at any time. There is no penalty if you make payments before they are due or pay more than the amount due each month. You can have your loan payments automatically deducted from your bank account, which may lower your interest rate. You can choose one of the following repayment options:

• Standard Repayment Plan – fixed monthly payments up to 10 years
• Graduated Repayment Plan – payments start off lower at first and gradually increase, usually every two years. The loan must be repaid in 10 years.
• Extended Fixed or Extended Graduated Repayment Plan – fixed or graduated monthly payments over a period of time not to exceed 25 years. This plan has additional borrower eligibility requirements.

Can I defer payment on a Parent PLUS Loan? Yes, under some conditions you can temporarily stop or lower your payments. You may qualify for a deferment if you return to school at least half-time, are unemployed or meet the rules for economic hardship, or are serving in active duty during a war. Parent borrowers of Federal Direct PLUS Loans first disbursed on or after July 1, 2008 also may have the option of deferring repayment when the depended student on whose behalf the loan was obtained is enrolled at least half-time. Parent borrowers must contact the Direct Loan Servicing Center at (800) 848-0979 to request the deferment. Remember that interest will still accrue during the deferment period; you will be sent interest statements and will have the option of paying the interest.

Terms and conditions for the Parent PLUS Loan are established by Congress and outlined in your master promissory note. For questions and additional information:
Federal Student Aid Information Center: (800) 433-3243
Direct Loan Servicing Center (your contact for everything related to repayment of your Direct Loan): (800) 848-0979; hearing-impaired borrowers can call (800) 848-0983