Parent Loans

There are many loan programs that can assist your parents in meeting their obligation for your college costs. Because Amherst College participates in the Federal Direct Loan Program, PLUS Loans are borrowed directly from the U.S. Department of Education through the College. Your parents may borrow a parent alternative loan through any program they choose. Listed below are the parent loan programs through which most parents borrowed in the past year. The programs are listed in descending order of frequency of use.

• Federal Direct Parent Loan for Undergraduate Students (PLUS):
  A federally sponsored program under which parents may borrow as much as the cost of attendance at the College less the amount of any student financial aid and other parent loans. Application for a Federal Direct PLUS loan is made through the College. PLUS loan information and the PLUS loan Pre-Application is available on our forms page. There is no need test; a review of credit worthiness is required. The interest rate is 7.9%. There is a net 2.5% fee - 4% federal origination fee, reduced by a rebate of 1.5%- which will be subtracted from the proceeds of the loan. Repayment begins no later than 60 days after disbursement of the loan. The repayment period may be as long as ten years, although a monthly minimum repayment of $50 is required. For more information, contact the Office of Financial Aid, or the US Department of Education at www.ed.gov. A memorandum about applying for a Federal Direct PLUS loan may be found in the forms section of our webpage. Applicants should complete a "preapplication" which may be found at the same website.
  
• MEFA Loan:
  The MEFA loan program (formerly the MassPlan) is a financing option offered by participating colleges in conjunction with the Massachusetts Educational Financing Authority. Residents of all states and Canada are eligible to apply. Loans may range from $2,000 to as much as the student's total cost of attendance, less any financial aid and other parent loans. There is no need test; a review of credit worthiness is required. Repayment begins a month after the loan is disbursed and may extend up to 20 years. The MEFA loan program has the option of a fixed or a variable interest rate and the option of immediate or deferred repayment. For 2007-2008, the fixed interest rate is 6.39% (APR 6.71%) for immediate repayment and 6.89% (APR 6.76-7.18% depending on the student's graduation date) for deferred repayment. The variable interest rate is reset quarterly and equals the London Interbank Offered Rate (LIBOR) plus 2.2% for immediate repayment (7.56%) or plus 2.7% for deferred payment loans (7.82-8.37%), and is capped at 12%. An origination fee, or prepaid finance charge, of 2.50% of the entire loan principal is included in the total loan amount.  For more information contact the Office of Financial Aid or MEFA, 125 Summer Street, Suite 300, Boston, MA 02110, (800) 449-6332 or on-line at http://www.mefa.org.
  
• Achiever Loan:
  This loan plan permits payment of four years of college costs over a period as long as 20 years. The interest rate varies quarterly and is set to the 3-month LIBOR (London Interbank Offered Rate), plus 3.85%. There is a loan fee of 2%. One option allows for payment of only interest while the student is enrolled in college. You may apply for an AchieverLoan on line at http://www.key.com/educate under the section "private parent loan." For more information, contact Key Education Resources, PO Box 9569, Boston, Massachusetts 02205-9569 or call 800 KEY-LEND.