Financial Aid - Federal School Code: 006972

 Federal Parent PLUS Loans


What is a Federal Parent PLUS Loan?
PLUS Loan Eligibility
Steps to Apply
Disbursements
Interest and Fees
Loan Delays, Cancellations, and Other Potential Problems

What is a Federal Parent PLUS Loan?

The Federal Direct PLUS Loan Program allows parents of dependent students to borrow low-interest loans to help pay for student educational expenses up to the Cost of Attendance minus all other financial assistance. A PLUS Loan is financial aid that must be repaid with interest, and interest is charged from the time of loan disbursement. The lender is the U. S. Department of Education. Visit Federal Student Aid for detailed information from the Department of Education about PLUS Loans, tax benefits advice and direct loan basics for parents.

When does repayment of a PLUS Loan begin?

The repayment period for a PLUS Loan begins on the date the loan is fully disbursed (paid out), as there is no grace period. Parent PLUS borrowers may contact their loan servicer to request a deferment. Deferments may be available:

     •while you or your student are enrolled at least half-time (6 units), and

     •for an additional 6 months after student ceases to be enrolled at least half-time

Use of Loan Funds

Parents may use the loan money they receive only to pay for their student's educational expenses at the school that disburses the funds. At Butte College, educational expenses include direct school charges such as enrollment and service fees, and indirect expenses including room and board, books and supplies, transportation, and personal expenses. See Cost of Attendance.

PLUS Loan Eligibility 

All eligibility requirements must be met in order to qualify for a PLUS Loan. If you or your student do not meet these criteria, please plan accordingly to help meet your student's school expenses.

Eligibility Criteria

Your student must have received a Financial Aid Award Notification email for the current academic year, which indicates their financial aid file is complete and their eligibility has been determined.

Your student must be enrolled in a degree-granting or eligible certificate program.

Your student must be registered in and actively attending a minimum of 6 units (at least half-time) per semester.

You and your student may not be in default on any type of student loan.

You and your student may not owe a repayment on a federal student grant.

Your student must meet Satisfactory Academic Progress (SAP) requirements. In order to maintain continuing eligibility, your student must also complete at least six units during each semester that loan funds are received.

Steps to Apply: 4-Step Direct PLUS Loan Application Process

Step 1: Your student must have completed a Free Application for Federal Student Aid (FAFSA) and received a Financial Aid Award Notification email for the current academic year, which indicates their financial aid file is complete and their eligibility has been determined.

Step 2: Parent must complete a Master Promissory Note (MPN) with the U.S. Department of Education, using your Federal PIN number (not your child's). The MPN is a legal document that explains the terms and conditions of the loan and binds you to repay the loan and any accrued interest and fees.

Step 3: Parent must complete a Credit Check with the U.S. Deptartment of Education. To be eligible for a Parent PLUS Loan, you must not have an adverse credit history. If you are found to have an adverse credit history, you may still borrow a PLUS Loan if you get an endorser who does not have such a history. An endorser is someone who agrees to repay the loan if you do not. If you are declined for a PLUS Loan and you choose not to use an endorser, your student may be eligible for additional unsubsidized loan funds.

Step 4: Parent must complete a Butte College Federal Direct PLUS Loan Application, a paper application which is available only through the Butte College Financial Aid Office. See contact information on this page.

Disbursements

Generally, a Parent PLUS Loan covers a full academic year and you, the parent, will receive two payments. Disbursements will be near the beginning of each regular semester. Payments may be delayed pending verification of your student's Satisfactory Academic Progress (SAP).

Butte College processes PLUS Loan disbursements as a paper check from the college, which is mailed to the parent at the address listed on the Butte College PLUS Loan application. Current balances owed to Butte College will be deducted from any aid received through Butte College. You, the borrower, have the right to cancel all or part of your loan or disbursement. This appeal must be submitted in writing to the Financial Aid Office.


Interest and Fees

Interest rates and fees are adjusted by Congress for each academic year, and begin July 1 each year. As per changes authorized by the Bipartisan Student Loan Certainty Act of 2013, the interest rate for Direct Loans will be the sum of a uniform "index rate" plus an "add-on" that varies depending on the type of loan (in this case, a PLUS loan taken out by a parent). The interest rate for a loan, once established, applies for the life of the loan -- that is, the loan has a fixed-rate. As a result, parent borrowers who borrow in more than one award year, will likely have a number of fixed-rate loans, each with a different interest rate.

INTEREST RATE

Interest accrues from the date of disbursement.

For a PLUS first disbursed on or after July 1, 2014, and before July 1, 2015, interest rate is 7.21%.

LOAN FEE

An origination fee is automatically deducted before disbursement.

For first disbursement before Oct. 1, 2014, the fee is 4.288%.

For first disbursement on or after Oct. 1, 2014 and before Oct. 1, 2015, fee is 4.292 %.

  Loan Delays, Cancellations, and Other Potential Problems

What kinds of problems could cause my Parent PLUS loan to be delayed or cancelled?

Non-Degree Status of Your Student

Students must be enrolled at Butte College in an eligible degree or certificate program to be eligible to apply for financial aid, including student loans.


Enrolled less than half-time (6 units)

Students must be enrolled in Butte College at least half-time (6 units) for the entire loan term. Open Entry/Open Exit and late-starting courses must be added by freeze dates to be eligible.


Lack of Satisfactory Academic Progress

•Students failing to meet required standards of Satisfactory Academic Progress (SAP) are not eligible to receive financial aid including loans.
• Loans for students on Financial Aid Probation or Excess Units Petitions may be delayed or denied until their Satisfactory Academic Progress status is confirmed.
• Students disqualified for lack of Satisfactory Academic Progress must be reinstated before they can apply for a loan, and may be subject to reduction or cancellation of loans.
• Students must complete at least six (6) payable units with a "C" or better in the fall semester to be eligible for the spring loan portion. Spring-only loans will not be approved for students who were enrolled in fall and did not complete six (6) payable units.


Incarcerated Students

Incarcerated students are not eligible for Direct PLUS Loans.
-A student is considered to be incarcerated if serving a criminal sentence in a federal, state, or local penitentiary, prison, jail, reformatory, work farm, or similar correctional institution (whether it is operated by the government or a contractor).
-A student is not considered to be incarcerated if in a half-way house or home detention or is sentenced to serve only weekends.