Supplemental loans are education loan funds that can be obtained in addition to the financial aid package offered by Wheaton College. The Financial Aid Office works with the student and family to determine the best options for their particular situation. The two main types of supplemental loans are Direct PLUS Loans which are federal funds borrowed by the parent and private “Alternative” loans. Following are details on Direct PLUS Loans and Alternative loans. Please contact the Financial Aid Office if you have additional questions.
Direct PLUS Loans for Parent Borrowers
PLUS loans are low-interest government loan funds available to parents to help meet educational costs.
ELIGIBILITY: Biological or adoptive parents of full-time or half-time dependent undergraduate students; not contingent upon income level. Consideration for Direct PLUS loan includes a required credit check. Parents and students must be U.S. citizens or eligible non-citizens. FAFSA for student must be filed.
ANNUAL AMOUNTS: Up to the total cost of educational expenses less other financial aid accepted by the student. No maximum loan amount per borrower.
INTEREST RATES: 7.21% for loans first disbursed on or after July 1, 2014 and before July 1, 2015. A non-refundable federal government origination fee will be deducted from the loan prior to its disbursement. The fee for loans first disbursed between December 1, 2013 and September 30, 2014 is 4.288% and 4.292% for loans first disbursed October 1, 2014 and later.
PAYMENT TERMS: Payment of principal and interest begins 60 days after disbursement of the loan with a minimum monthly payment of $50.00. Repayment may last up to 10 years. You may prepay at any time without penalty. Loan consolidation and graduated repayment options are available.
WHEN TO APPLY: In most cases, applicants should allow three weeks of processing time before the funds are needed. However, if the funds are needed for the beginning of the fall semester, Direct PLUS Loan applications should be made by mid-June. If funds are needed for the beginning of the spring semester, apply in November. It is also best to wait until the student's aid award is complete so that you know the amount of loan eligibility.
HOW TO APPLY:
Apply online for a PLUS loan and sign the master promissory note (MPN) at www.studentloans.gov. To find the PLUS application, you will need to log in using your FSA ID in order to access the area where you can apply for the PLUS loan and sign the master promissory note. When you input your SSN, do NOT use hyphens. In the date, slashes are acceptable.
A second supplemental borrowing option is an Alternative loan. An Alternative loan is an education loan to the student from private lender funds which are not federally-guaranteed. Because of this, the interest rate is somewhat higher than on Federal Stafford loans, and there are not the same provisions for loan cancellations and discharges. Generally, a credit check is required. However, since most students have little or no credit, a credit-worthy co-borrower is usually necessary for this type of loan.
- Amount eligible to be borrowed: Up to the amount of the cost of attendance less any other financial aid accepted.
- Interest rate: Some variable, some fixed.
- Grace period: 6 months after student drops below at least half-time enrollment.
- Federal consolidation with Stafford loans: No
If the student is interested in applying for an alternative loan, we suggest he/she research lenders by reviewing their websites and then contact the lender directly to apply.
Steps to apply for an alternative loan:
Some of these are required by the Truth in Lending Act and the Higher Education Opportunity Act that require new disclosures for private student loans.
- Choose a lender and apply for the loan (usually online). The lender will provide a disclosure form to help you understand your loan options.
- Provide additional information as required by your lender.
- Receive and review your Approval Disclosure and carefully read the terms of the loan offer.
- Notify your lender of your acceptance of the loan terms by the date indicated on the Approval Disclosure.
- Receive, review, sign and return the completed borrower Self-Certification form to your lender prior to disbursement.
- Receive and review your Final Disclosure. If you wish to cancel the loan, you will need to notify your lender by the deadline indicated (Right to Cancel date) indicated on the disclosure.
- Receive disbursement of loan funds. The timing of the disbursement of funds will be determined by the school.