Most families need to go beyond the direct payment to the College or the payment plan to help meet their financial responsibility for the cost of a Holy Cross education. We advise first and foremost that all families maximize their eligibility for all federal loans in the form of the Federal Direct Loans for students and the Federal Direct PLUS Loan for parents before using any other credit based financing.
Federal Direct PLUS Loan
To help cover the gap between what financial aid covers and what is still left to pay, parents of dependent students can apply for the Federal Direct Parent PLUS Loan. Like the subsidized and unsubsidized federal student loans, the federal government is the lender for the Parent PLUS Loan; unlike the federal student loans, though, the PLUS loan is credit-based, and parents can take out any amount up to the total cost of attendance. The interest rate for the 2021-2022 academic year is fixed at 6.28 percent with options to enter immediate repayment (60 days after the full disbursement of the loan) or to defer repayment of interest and principal until after the student graduates or ceases to be enrolled at least half time.
The U.S. Department of Education assesses an origination fee on every PLUS loan taken out. In other words, the Department retains a certain percentage of every disbursement, so the amount that actually disburses to the student's account will be reduced by that percentage. For all PLUS loans where the first disbursement is made on or after October 1, 2020, and before October 1, 2022, the loan fee is 4.228 percent.
To apply for the Parent PLUS Loan:
Create an FSA ID (if not already created).
Please note: when entering the loan amount requested, parents have the option to specify an amount or simply borrow the maximum amount for which they are eligible. To minimize families' overall debt burden, we STRONGLY recommend families only borrow what is needed and use that as the requested amount, as opposed to simply borrowing up to the maximum eligible amount.
The Financial Aid office will automatically receive the status of the PLUS Loan request one to two business days after the application is submitted, after which the office will process the loan, if approved. Please note, the financial aid office will not begin to process PLUS Loans until mid-July.
Private Loan Information
The Office of Financial Aid does not utilize a preferred lender list. Instead we offer several suggestions and questions that students and their families should consider when researching private loans.
We suggest that students exhaust all of their federal loan eligibility before applying for a private loan. Also, parents might consider the Federal Direct Parent PLUS Loan before looking into a private loan. Information about the Parent PLUS Loan is available here.
Private loans may be borrowed yearly or per-semester. Keep in mind that a loan that is taken out per semester may result in multiple inquiries to the borrower’s credit report. The amount of the loan will need to be reported. If you need assistance planning or have questions, please do not hesitate to contact us.
To reduce students’ overall indebtedness we suggest considering a private loan in the parent’s name. If not, then the student will need a creditworthy co-borrower to apply for a private loan. Any co-borrower assumes responsibility for the loan should the borrower fail to repay.
When researching and comparing lenders, we suggest that families consider the following:
- What is the interest rate?
Is the interest rate fixed or variable?
- When is interest capitalized?
- Do you offer interest rate reductions for auto-debit payments?
- Do you charge any fees? If yes, are the fees deducted from the disbursements? Are they added to the total loan amount?
- Do you offer flexible repayment options?
- Are in school payments required?
- May I request a deferment or forbearance after I leave school and enter repayment?
- Can I talk to a customer service person, not an automated system? Can I email customer service questions/concerns? Remember that you will have a long relationship with the lender you choose, so make sure you are comfortable with the level of service they provide.
- Do you have a history of selling the loans?