Supplemental loans are education loan funds that can be obtained in addition to the financial aid package offered by Wheaton College. The Student Financial Services 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. Please contact the Student Financial Services Office if you have additional questions.
Direct PLUS Loans for Parent Borrowers
PLUS loans are 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. Parents and students must be U.S. citizens or eligible non-citizens. FAFSA for student must be filed. Consideration for Direct PLUS loan includes a required credit check. A credit freeze may prevent a borrower or an endorser from completing the credit check process and the credit freeze must be removed. For more information, please see this notice from the US Department of Education.
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 AND FEES: 5.3% for loans first disbursed on or after July 1, 2020 and before July 1, 2021. A non-refundable federal government origination fee will be deducted from the loan prior to each disbursement. The fee for loans first disbursed on or after 10/1/19 and before 10/1/20 is 4.264%.
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 can be higher than on Federal Stafford loans, and there are not the same provisions for loan cancellations and discharges. Alternative loans can be in the student's name and, 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. Alternative loans are also available for a parent or a spouse to borrow on behalf of the student and a credit check would be used to determine eligibility.
- 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
Note for co-signer releases:
- Read terms for release carefully. Make a checklist before repayment starts of all things that must be done in order for cosigner release to happen. This will include the number of consecutive on time payments, etc. Before applying, check to see what income rules are required for the student to take over payments.
- Discuss each payment with your student. You don’t want your student to miss a payment that costs you getting off the loan. As long as you are a responsible party, you have a right to know when payments are due. You may have to help until the student is solely legally responsible. It’s preferable to help with the monthly payment for awhile so that the loan won't be ineligible for cosigner release.
- Apply for cosigner release as soon as the requirements are met. Don’t wait for a letter to come in from the servicer.
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.