Princeton Parent Loan Program

LAST UPDATED: February 28, 2014

What You Should Know

The Princeton Parent Loan (PPL) program provides eligible parents or guardians a long-term financing program to pay the undergraduate student tuition bill. The parent loan program can provide funds for up to four years, with repayment over a period of up to 14 years. The program offers interest rates that have been favorable in the past, a convenient application process, and no application fees.

Note to Parents & Guardians

Before choosing any loan program, including the PPL, we encourage you to meet with a financial aid counselor to determine the loan program that works best for you.

Eligibility

You are eligible for the PPL if you are the parent or guardian of a Princeton undergraduate student, have an income of less than $500,000, and are deemed creditworthy via our credit analysis.

If your income is greater than $500,000, you may apply for the PPL on an exception basis, explaining your special circumstances as part of your loan application. These circumstances might include having more than one child in college, high medical expenses, or a documented decrease in income as compared with your most recent tax return.

If you are not a U.S. citizen or a permanent resident, you may still be able to borrow, but our ability to enforce the loan contract in your country is a factor that we will consider as we evaluate your application.

Applying for a Princeton Parent Loan

The application asks you to provide information needed to evaluate your credit history and your ability to meet the repayment terms. In most cases parents need to complete only one application to be approved for four years. Applications are only accepted electronically. For complete requirements see Apply for a Princeton Parent Loan Step-by-Step.

You may apply for a PPL at any time during your student’s period of enrollment, but applications must reach the Office of the Finance and Treasury, Donald J. Heyer, Parent Loans, by the filing deadline for each semester. The filing dates are June 30 for fall applications and January 1 for spring applications. These dates are firm. Loans cannot be approved retroactively.

After submitting your application, you will be contacted if there are any questions and will be advised within 30 days of the status of your approval.

Loan Amount

For non-aid students, the PPL limit is the yearly “cost of attendance” that remains after outside scholarships have been considered. The cost of attendance includes tuition, fees, room and board, and an allowance for books and personal expenses.

For financial aid students, the maximum amount that can be borrowed normally equals the expected parental contribution outlined in the aid award letter.

Loan Term

You may apply for a PPL on a year-by-year basis. However, a four-year loan levels the monthly installment over the duration of your student’s enrollment and can result in significant interest savings. See the Loan Amount Worksheet for cost comparison examples.

The repayment period is determined by adding 10 years to the student’s remaining enrollment period. The normal repayment periods are: 14 years for freshmen, 13 years for sophomores, 12 years for juniors, and 11 years for seniors.

Interest Rates

By using the University’s creditworthiness to secure loan funds, interest rates under the PPL historically have been below market rates in effect at the time.

The exact interest rates cannot be provided to you until July 15. If, after learning of the interest rates, you choose not to proceed with the PPL, you may withdraw your application without penalty.

You may choose either a variable or fixed-term interest rate.

Variable Rate

This loan will have a changeable interest rate based on the London Interbank
Offered Rate (LIBOR) and includes an administrative component. Interest will be adjusted every six months (in July and in January) for the life of the loan. Twice each year you will be notified of the new rates.

Fixed-Term Rate

Under this option, the interest rate on the entire loan amount remains fixed for the life of the loan. Rates are set yearly in July and include an administrative component.

If you elect a fixed PPL for each year of your student’s undergraduate education, you will actually have four separate interest rates, one for each year that a loan was credited to your student’s account. These individual interest rates will not change during the 10-year repayment period.

Comparison of Interest Rates & Fees for Available Parent Loan Programs

Once a contract is signed at either a fixed or a variable rate, that contract will not be changed for the funds advanced, and there will be no refinancing of existing loans. It is, however, possible to change loan types for funds not yet advanced. This process requires processing new loan documents.

Loan Disbursement & Repayment

The annual loan amount is credited to your student’s University account in two equal amounts; on August 15 in advance of the fall semester, and on January 15 in advance of the spring semester.

Loan repayment begins on September 1 of the first year in which borrowing takes place. Interest is billed only for that portion of the loan that has actually been advanced.

In the PPL, Princeton is the lender and your repayment will be made to Princeton.

Princeton uses a billing service provider, Educational Computer Systems, Inc. (ECSI), who will provide you with monthly loan statements and information. This billing arrangement also allows us to provide you with the ability to make recurring or one-time electronic payments, sign up for electronic bills, and to view your payment and billing history online at any time.

Note

A one-time deduction request is required for the September payment after which deductions will be automatic.

Payment information and important login information will be provided on your PPL billing statement. We encourage you to pay by recurring automatic deductions. However, if you choose to pay by check, make your check payable to “Princeton University – 3M” and send it and the remittance portion of your statement to: Educational Computer Systems, Inc., 181 Montour Road, Coraopolis, PA 15108-9408.

The University does not accept credit cards, payments by phone, or post-dated checks as a form of PPL payment. A $25.00 fee will be assessed for any check or electronic payment request that is not honored by your bank.

Prepayment

No penalty is charged for prepaying the loan. If you prepay a semester or annual amount and if the loan continues, a new monthly payment that recognizes the lower-than-anticipated current balance will be calculated. The term of the loan will not change, so the result should be lower monthly payments.

Withdrawal from the University

If the student withdraws from the University, future advances of the PPL will be canceled. Payments will continue at the current monthly rate.

Changes in Financial Aid or Financial Need

If the student’s financial aid is increased after PPL approval, the amount of the increased aid should produce a credit balance on the student account. Modest aid increases will not affect the PPL account, and surplus funds are available for refund.

If there is a change in the family’s finances that significantly increases financial aid, the PPL for that academic year will be reduced in direct proportion to the increase in financial aid.

You may request an increase over the original loan amount if your need to borrow rises. However, you will be required to complete a new application form to determine your creditworthiness for the higher amount.

Loan Approval Documents

If approved, you will be sent a series of documents electronically to the email address provided with the application. It is important that you electronically sign these documents in a timely manner.

Due to federal regulations, participation in the PPL depends upon your confirmed review of the disclosure statements and the signing of the loan promissory note. If these documents are not signed, the application will be withdrawn, the anticipated credit previously applied to the student account will be canceled, and a late payment charge will be assessed on the account as of the term bill deadline for semester payments. Failure to complete these documents will result in cancellation of your loan.

Cancelling Your Loan

You may cancel anticipated borrowing at any time without penalty by submitting your request in writing to puloans@princeton.edu or Princeton Parent Loans, 701 Carnegie Center, Suite 161, Princeton, NJ 08540.

A Note About Taxes

Under the Taxpayer Relief Act of 1997 you may be eligible for a tax credit on interest you pay on educational loans. Consult with your tax accountant or attorney to determine your personal eligibility.

Financial Aid Code of Conduct

Nondiscrimination Statement

In compliance with Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, and other federal, state, and local laws, Princeton University does not discriminate on the basis of age, race, color, sex, sexual orientation, gender identity, religion, national or ethnic origin, disability, or status as a disabled or Vietnam-era veteran in any phase of its employment process, in any phase of its admission or financial aid programs, or other aspects of its educational programs or activities.

The vice provost for institutional equity and diversity is the individual designated by the University to coordinate its efforts to comply with Title IX, Section 504 and other equal opportunity and affirmative action regulations and laws. Questions or concerns regarding Title IX, Section 504 or other aspects of Princeton’s equal opportunity or affirmative action programs should be directed to the Office of the Vice Provost for Institutional Equity and Diversity, Princeton University, 205 Nassau Hall, Princeton, NJ 08544 or (609) 258-6110.


 

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