Nellie Mae ParentPLUS Loan life cycle

Parents Learn the life cycle of a Nellie Mae ParentPLUS Loan to understand how Federal PLUS Loans work.

 

The following information summarizes the lifecycle of a Federal PLUS Loan for parents under the Federal Family Education Loan Program (FFELP). By understanding these basic steps, you will be better prepared to borrow wisely and manage repayment successfully.

  1. Filing the FAFSA
  2. Completing a PLUS application and Promissory Note
  3. Receiving your loan proceeds
  4. Repaying your loan
  5. Paying your loan in full

How will you pay for your child's education? Download Financing Your Child's Future: A parents guide to planning and paying for college (PDF, 1.41MB)

Stage 1: Filing the FAFSA Dependent students and their parents are not required to file the Free Application for Federal Student Aid (FAFSA) to get a PLUS Loan, but many schools prefer it. One important reason for this is to be sure that the student receives all other federal aid for which he or she may be eligible.

  • File the FAFSA as soon as possible after January 1 for the next academic year (file faster online at www.fafsa.ed.gov) every year your dependent child will be enrolled in an eligible undergraduate program.
  • Information from the FAFSA is sent by the federal processing center to your schools.
  • The schools send the student financial aid award notices indicating the amount of financial aid for which he or she is eligible.
  • The difference between the student's total financial aid and the school's cost of attendance is the amount parents may be eligible to borrow under a ParentPLUS Loan.

Stage 2: Completing a PLUS application and Promissory Note Parents must complete a ParentPLUS Loan Application and Promissory Note to apply for the loan. Students must complete part of the form.

  • Check with your school's financial aid office to find out their preferred process for ParentPLUS Loan applicants.
  • Parents can save time by applying online for a ParentPLUS Loan from Nellie Mae. You can also apply by phone at 800-806-3672, M–F, 8 am–8 pm ET or download an application.
  • After submitting your ParentPLUS application, Nellie Mae will perform a credit check and the school will certify the loan request.
  • Keep your copy of the ParentPLUS Loan promissory note in a permanent record file.

Stage 3: Receiving your loan proceeds Once your ParentPLUS Loan application has been approved and processed, the loan funds are sent ("disbursed") to the student's school based on a schedule defined by the school and Nellie Mae

  • Nellie Mae sends ParentPLUS Loan proceeds to the student's school either by paper check or electronic funds transfer.
  • You may be required to endorse the check; the school will contact you if this is necessary.
  • The school applies your loan proceeds to any outstanding education costs first. After your bill has been satisfied, the school will return any remaining funds to you or to the student (with your authorization).
  • In general, your ParentPLUS Loan will be disbursed in at least two installments (such as half in the fall and half in the spring).

Stage 4: Repaying your loan Parents must begin repaying a PLUS Loan within 60 days after the loan is fully disbursed. PLUS Loans generally must be repaid within 10 years. Nellie Mae PLUS Loan borrowers may choose from the following repayment options:

  • Standard repayment: Pay a fixed monthly amount (a minimum of $50) for up to 10 years. The actual length of repayment depends on the total amount borrowed.
  • Graduated repayment: Make lower payments for two or four years, followed by standard principal and interest payments.
  • Income-sensitive repayment: Adjust your monthly payments based on your current salary.
  • Extended repayment: Take up to 25 years to pay off loans totaling $30,000 or more.

Nellie Mae rewards ParentPLUS Loan borrowers for on-time repayment. Eligible borrowers receive interest rate reductions and a credit equal to 2.4% of their original principal loan balance. Learn more at our ParentPLUS page.

Postponing loan payments

  • Deferment is a temporary period when no loan payment is due. Interest accrues on PLUS Loans during deferment, but payments can be made or postponed. If your interest payments are postponed, the interest is added on to the principal of your loan (capitalized). PLUS Loan payments may be deferred if the parent remains in or returns to school at least half time; participates full time in a graduate fellowship program or in rehabilitation training; is seeking but unable to find full-time employment (maximum three years); experiences economic hardship (maximum three years). Borrowers called to active military status during school or during their grace periods are also eligible for student loan deferment
  • If you are not eligible for deferment but are still unable to make your scheduled student loan payments, you may request forbearance from your lender. Forbearance is a period (granted in 12-month intervals for up to three years) when smaller-than-usual or no payments are required. If no payments are made, interest will accrue and capitalize.
  • Postponing payments may affect eligibility for borrower benefit programs.

Stage 5: Paying your loan in full After you make your final loan payment, Nellie Mae sends you a copy of your promissory note confirming that your ParentPLUS Loan is paid in full.

Nellie Mae notifies the credit reporting agencies that you have fully repaid your loan.

Congratulations! You have paid off your ParentPLUS Loan!

Apply for the Nellie Mae ParentPLUS Loan