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What is a Federal Plus loan?
A Federal Direct Plus loan is an educational loan borrowed by the parent for the student.
Standard repayment on a Federal Direct Plus loan extends over ten years and the interest
rate on a plus loan is fixed at 7.9 %. Interest and principal is paid after disbursement.
But there are options to defer the interest and the principal while the student is enrolled
half time.
Interest does accrue and will be added to the principal of the loan at the time that
the parents begin repaying it. The Plus loan is one way that parents spread out the cost
of their family contribution over a longer period of time. And parents who are citizens
or permanent residents can apply for the Federal Plus Loan. The amount that a parent can apply
for in a Federal Direct Plus loan is the total cost of education, including tuition and room
and board, books, personal expenses, travel, less the financial aid.