PLUS and Alternative Loans
Parents of dependent undergraduate students may choose to apply for a PLUS loan to assist in meeting the cost of education. The student must be attending school at least a half-time (6 credit hours for undergraduate students) in an approved program. Approval for a PLUS loan is based on a credit check. However, this credit check is more modest as it is not usually debt-to-income or credit score driven. Rather, it determines whether the parent has an adverse credit history. An adverse credit history is defined as being 90 or more days late on any debt or having Title IV debt (including a grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.
Students whose parents are unable to obtain a credit approval for a PLUS loan may qualify for additional funding through the Federal Stafford loan program. Parents who wish to apply for a PLUS loan must first complete a FAFSA form.
PLUS Interest Rates and Fees
For Direct PLUS Loans first disbursed on or after July 1, 2013, and before July 1, 2014, the interest rate is 6.41%. For Direct PLUS Loans first disbursed on or after July 1, 2014, and before July 1, 2015, the interest rate is 7.21%. These are fixed interest rates for the life of the loan.
Each Federal PLUS Loan disbursement is subject to a 4.288% origination fee which is taken from the value of the loan. The loan amounts listed on a Financial Aid Award Notice represent the gross amount of the loan (amount before the fees have been paid).
Applying for a Federal PLUS Loan
Complete the following steps to apply for a Federal PLUS Loan:
- Complete the Free Application for Federal Student Aid (FAFSA)
- Complete a PLUS Loan Application and Master Promissory Note (Available after July 1st for the upcoming academic year. Please indicate dollar amount on application)
Alternative Educational Loans
Alternative student loans are private loans offered to students to assist with educational expenses. Since the loans are privately funded, the terms and conditions will vary based on the lender. This also means that interest rates and fees are not federally regulated and are therefore set by the individual lenders. Students are highly encouraged to carefully review the details of private loans before applying. Whenever possible, students considering alternative loans are encouraged to first consider federal student loans as the terms and conditions of federal loans may be more favorable than the provisions of alternative loans.
Eligibility for an alternative student loan is determined by the lender. In most cases, a student will need a co-signer in order to be approved. The lender will provide the student with an applicant self-certification form. Once the loan has been approved by the lender, the Westminster College Financial Aid Office will need to certify the loan amount.
Westminster College adheres to a Code of Conduct for Private Education Loans.
Alternative Loan Amounts
The amount available to be borrowed in alternative loan funding will vary by student. The certified loan amount cannot exceed the student's Cost of Attendance less any other financial aid received. If the amount approved by the lender is higher than the allowable maximum, it will be reduced by the school.
Applying for an Alternative Loan
Students should contact the lender of their choice for application instructions. Most lenders have online applications. We advise students to pursue all other sources of funding before applying for an alternative loan. Please be sure to carefully review all terms and conditions before completing an application.