PLUS Loan Summary

Federal Direct PLUS Loan (Loan for Parents)

The Direct PLUS Loan program provides loans to parents of eligible dependent undergraduate students to help pay their costs of postsecondary education. The PLUS Loan is a federally funded loan. UCI is the loan originator. The U.S. Department of Education is the lender.

Loan limits: The yearly limit is the student's designated cost of attendance, minus other financial aid and the student's expected family contribution, not to exceed $4,000. The aggregate limit a parent may borrow on behalf of each eligible student is $20,000.

Total origination or insurance fee: 4% of the principal amount of the loan

Interest rate: Variable, adjusted annually. The annual interest rate is capped at 9%.
Interest is charged on the loan from the date of the first disbursement until the loan is paid in full.

Prepayment: No penalty for early repayment

Initial grace period: None

Repayment period begins: Repayment begins on the day the loan is disbursed. The first payment of principal and interest is due within 60 days after the final disbursement for an academic year.

Repayment plan(s): There are three repayment plans for Direct Loans:

• Standard plan - up to 10 years to repay
• Extended plan - varies 12 to 30 years to repay
• Graduated plan - varies 12 - 30 years and payment increase every two years

Credit reporting: The U.S. Department of Education may report the status of loans to national credit bureaus.

Late charges: Late charges, penalties, collection, and other costs may be assessed for failure to pay all or a portion of a required installment payment when due.

Deferments and forbearance: Under certain circumstances, parents can receive deferment or forbearance on a PLUS loan. Generally, the conditions for eligibility and procedures for requesting a deferment or forbearance that apply to other Federal Direct Loans also apply to PLUS loans. However, since all PLUS loans are unsubsidized, interest accrues during periods of deferment or forbearance. If interest is not paid as it accrues, it will be capitalized.

Death cancellation: The total amount owed on the loan is canceled in the event of the death of the borrower or the death of the student on whose behalf the loan was made.

Permanent and total disability: The total amount owed on the loan is canceled if the borrower becomes permanently and totally disabled after receiving the loan.

Default: Failure to make an installment payment when it is due or to comply with the other terms of the promissory note may result in the following:

• Loss of deferment and/or cancellation benefits
• Imposition of late charges
• Negative reports to national credit bureaus
• Loan acceleration
• Assessment of collection costs, attorney fees, and litigation costs
• Referral of the loan to an outside collection agency
• Ineligibility for further federal student financial assistance
• Seizure of Federal tax refunds