FAQs

A: A Federal Pell Grant, unlike a loan, does not have to be repaid. Federal Pell Grants usually are awarded only to undergraduate students who have not earned a bachelor’s or a professional degree. (In some cases, however, a student enrolled in a post baccalaureate teacher certification program might receive a Federal Pell Grant.) You are not eligible to receive a Federal Pell Grant if you are incarcerated in a federal or state penal institution or are subject to an involuntary civil commitment upon completion of a period of incarceration for a forcible or no forcible sexual offense.

A: Amounts can change yearly. The maximum Federal Pell Grant award is $5,645 for the 2013–14 award year (July 1, 2013 to June 30, 2014). For the 2014–15 award year (July 1, 2014 to June 30, 2015), the maximum award will be $5,730. The amount you get, though, will depend on

your financial need,
your cost of attendance,
your status as a full-time or part-time student, and
your plans to attend school for a full academic year or less.
You may not receive Federal Pell Grant funds from more than one school at a time

A: It depends. If your parent or guardian was a member of the U.S. armed forces and died as a result of military service performed in Iraq or Afghanistan after the events of 9/11, you may be eligible for additional Federal Pell Grant funds if, at the time of your parent’s or guardian’s death, you were

less than 24 years of age or
Enrolled in college or career school at least part-time.
If you meet these requirements and are eligible to receive a Federal Pell Grant, your eligibility will be calculated as if your Expected Family Contribution (EFC) were zero. Payments are adjusted if you are enrolled less than full-time.

If you meet those requirements but aren’t eligible to receive a Federal Pell Grant due to your EFC being too high, you might be able to get an Iraq and Afghanistan Service Grant.

A: Generally, your grant or loan will cover a full academic year and your school will disburse (pay out) your money in at least two payments called disbursements. In most cases, your school must pay you at least once per term (semester, trimester, or quarter). Schools that don’t use traditional terms such as semesters or quarters usually must pay you at least twice per academic year—for instance, at the beginning and midpoint of your academic year.

If you’re a parent taking out a Direct PLUS Loan to help pay for your child’s education expenses, your loan funds will be disbursed according to the same type of schedule (usually, at least twice per academic year).
If you’re a first-year undergraduate student and a first-time borrower, you may have to wait 30 days after the first day of your enrollment period (semester, trimester, etc.) for your first disbursement. Check with your school to see whether this rule applies there.
If you’re a first-time borrower of a Direct Subsidized Loan or a Direct Unsubsidized Loan, you must complete entrance counseling before you receive your first loan disbursement. Similarly, if you are a graduate or professional student taking out a Direct PLUS Loan for the first time, you must complete entrance counseling before receiving your first disbursement. If you are a parent taking out a Direct PLUS Loan to help pay for your child’s education, you will not be required to participate in entrance counseling.

A: It depends on what type of aid you’ll be receiving—grants, student loans, work-study, or parent loans.

Grants and Student Loans

Typically, the college first applies your grant or loan money toward your tuition, fees, and (if you live on campus) room and board. Any money left over is paid to you for other expenses. You might be able to choose whether the leftover money comes to you by check, cash, a credit to your bank account, or another method.

If your loan is disbursed but then you realize that you don’t need the money after all, you may cancel your loan within 120 days of the disbursement, and no interest or fees will be charged.

A: The Federal PLUS Loan is a loan borrowed by a parent on behalf of a child to help pay for tuition and school related expenses at an eligible college or university, or by a graduate student for graduate school. The student must be enrolled at least half time, and the parent or graduate student must pass a credit check in order to receive this loan. For more information, visit Graduate PLUS Loans. About Parent PLUS Loans the primary benefit of the PLUS Loan is that a parent can borrow a federally guaranteed low interest loan to help pay for their child’s education. A Federal PLUS Loan allows a parent to borrow the total cost of undergraduate education including tuition, room and board, and any other eligible school expenses, minus any aid the child is receiving in their name. Here’s a brief graphical look at where PLUS loans fit in the big picture of a cost of a college education. – See more at: http://www.parentplusloan.com.

PLUS loans, along with private student loans, can help fill the gap after Stafford loans and scholarships.

A: Typically, yes. It is not required at all schools, but it is strongly recommended. The PLUS Loan is a federal student loan and therefore must be “certified” (approved) by the college’s or university’s financial aid office. If your college or university requires the FAFSA for all students, they will not certify a PLUS Loan without a FAFSA Application on file.

A: The interest rate for a Parent Plus loan is 7.21% fixed. Interest accrues on this loan when it is disbursed to the school. You may receive a 0.25% repayment interest rate credit when payments are set up for automatic debit from a bank account. If you are a parent with PLUS Loans and you want to lower your monthly payments, you may consider consolidating your PLUS Loans after the final disbursement for each academic year.

A: Parents are required to pay a 3% origination fee. A federal default fee of 1% may also apply. These fees are deducted from the principal at each disbursement.

A: No. The PLUS Loan is a Parent loan, taken out in the parent’s name — the student is not the borrower and the loan cannot be transferred. If, as a parent, you are interested in a loan that has such a feature, you’ll need to resort to private student loans. These loans are in the student’s name, and depending on the lender, may have a cosigner release option. After a certain number of consecutive on time payments, the parent (as a cosigner) can apply to be released from the loan, making it entirely the student’s obligation.

A: The Federal PLUS loan has an annual limit of up to the full cost of attendance (including tuition, fees, room and board, books and supplies) minus other aid received. There is no aggregate loan limit. Families should exhaust eligibility for gift aid (money that does not need to be repaid) before relying on loans. When choosing a loan, it is best to borrow first from the Federal Stafford loan, which has a lower interest rate and fees than the Federal PLUS loan, and more flexible repayment terms.