Understanding the Federal Direct PLUS Program [Education]: Key Insights

Definition & Meaning

The Federal Direct PLUS Program is a federal loan initiative designed to help parents of dependent students and graduate or professional students cover educational expenses. This program is part of the Direct Loan Program established under Title IV, Part D of the Higher Education Act (HEA). Under this program, eligible borrowers can obtain loans to pay for tuition and other costs associated with attending schools that participate in the Direct Loan Program. Borrowers are responsible for the interest that accrues on these loans during all periods.

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Legal Use & context

The Federal Direct PLUS Program is primarily used in the context of education law and financial aid. It is relevant for parents seeking to finance their children's education as well as for graduate students who need additional funding. Users can manage their loan applications and repayments through various legal forms and templates provided by resources like US Legal Forms, which can simplify the process.

Key legal elements

Eligibility is limited to parents of dependent undergraduate students and graduate or professional students.
The loan amount can cover the full cost of attendance minus any other financial aid received.
Borrowers must pass a credit check to qualify for the loan.
Interest accrues from the date of disbursement.
Repayment begins shortly after the loan is disbursed, although deferment options may be available.

Real-world examples

Here are a couple of examples of abatement:

Example 1: A parent takes out a Federal Direct PLUS loan to cover the remaining tuition costs for their child attending college after considering other financial aid received.

Example 2: A graduate student applies for a Federal Direct PLUS loan to finance their education expenses, including tuition and living costs, while pursuing a master's degree. (hypothetical example)

Relevant laws & statutes

The Federal Direct PLUS Program is governed by the Higher Education Act (HEA), specifically Title IV, Part D. Key sections include:

20 U.S.C. § 1078: Authorizes the Federal Direct PLUS Program.
20 U.S.C. § 1087a: Outlines general provisions regarding student assistance.

State-by-state differences

State	Notes
California	State-specific financial aid programs may supplement federal loans.
New York	Offers additional state grants that can affect the amount borrowed through PLUS loans.

This is not a complete list. State laws vary, and users should consult local rules for specific guidance.

Comparison with related terms

Term	Definition	Difference
Federal Direct Subsidized Loan	A federal loan for students that does not accrue interest while the student is in school.	PLUS loans accrue interest immediately, while subsidized loans do not.
Federal Direct Unsubsidized Loan	A federal loan for students that accrues interest while in school.	Unsubsidized loans are available to both undergraduate and graduate students, while PLUS loans are specifically for parents and graduate students.

Common misunderstandings

What to do if this term applies to you

If you are considering a Federal Direct PLUS loan, start by reviewing your eligibility and the amount you may need. You can apply through the federal student aid website. For assistance with forms and applications, explore US Legal Forms' templates designed for educational loans. If your financial situation is complex, consulting with a financial advisor or legal professional is advisable.

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Quick facts

Loan Type: Federal Direct PLUS Loan
Eligibility: Parents of dependent students, graduate/professional students
Interest Accrual: Begins at disbursement
Repayment: Starts shortly after disbursement
Credit Check: Required for eligibility