There are several programs that can assist your parents in meeting their obligation for your college costs. Here is a summary of a number of parent loans and family financing alternatives.
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 requires submission of the Free Application for Federal Student Aid (FAFSA).
There is no need test; a review of credit worthiness is required. To apply for a Federal Direct PLUS loan through the U.S. Department of Education, please go to http://studentloans.gov. You will be required to sign in and provide personally identifying information including the Federal Student Aid PIN assigned to the parent who is applying for the PLUS loan. Once your application has been completed you will be notified instantly of the credit decision. If your application is approved and you are a first-time borrower for the student named in the application, you will be prompted to complete an electronic Master Promissory Note (eMPN) immediately following your loan application.
The interest rate is 6.41%. There is a 4.204% federal origination fee, which will be subtracted from the proceeds of the loan.
Repayment begins no later than 60 days after disbursement of the loan; however, for Federal Direct PLUS loans first disbursed on or after July 1, 2008, the parent may defer repayment while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and for an additional six months after the student ceases to be enrolled at least half-time. 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.
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 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 fifteen years. The MEFA loan program has the option of a fixed or a monthly variable interest rate. For 2012-2013, the deferred, fixed interest rate is 8.09% (APR 7.95-8.68%). An origination fee of 4.00% 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, #14, Boston, MA 02110, (800) 449-6332 or on-line at http://www.mefa.org .
Monthly Payment Plan
This plan is sponsored by the College and administered by Tuition Management Systems (TMS). Through the plan, a student's annual charges may be paid in ten installments beginning in June before the start of the academic year. Those starting the plan after June 1 must include back payments with the application. There is a $65 non-refundable application fee; there is no finance or interest charge. For more information, contact the Office of the Comptroller (413) 542-2811, Tuition Management Systems at (800) 722-4867, or apply online at http://www.afford.com/amherst .