Academic Competitiveness Grant (ACG)

The Academic Competitiveness Grant was made available for the first time for the 2006-2007 school year for first-year college students who graduated from high school after January 1, 2006, and for second-year college students who graduated from high school after January 1, 2005.

How Much Can a Student Receive?

An Academic Competitiveness Grant provides $750 for the first year of study and $1,300 for the second year. Note: The amount of the ACG, when combined with a Pell Grant, may not exceed the student's cost of attendance. In addition, if the number of eligible students is large enough that payment of the full grant amounts would exceed the program appropriation in any fiscal year, then the amount of the grant to each eligible student may be ratably reduced.

Eligibility Requirements

To be eligible for each academic year, a student must:

• be a U.S. citizen or eligible non-citizen;
• be a Federal Pell Grant recipient;
• be enrolled at least half-time in a degree program;
• be a first or second-year undergraduate student or a student in a certificate program of at least one year in a degree program at a two-year or four-year degree-granting institution
• have completed a rigorous secondary school program of study (after January 1, 2006, if a first-year student, and after January 1, 2005, if a second-year student); and
• if a first-year student — not have been previously enrolled in an ACG-eligible program while at or below age of compulsory school attendance; or
• if a second-year student — have at least a cumulative 3.0 grade point average (GPA) on a 4.0 scale as of the end of the first year of undergraduate study.

Recognized Rigorous Secondary School Programs of Study

For qualifying for an ACG, any one of the following programs meet the "rigorous secondary school program of study" requirement:

1. Rigorous secondary school programs designated by state education agencies (SEAs) and state-authorized local education agencies (LEAs) and recognized by the Secretary of Education.
2. Advanced or honors secondary school programs established by states.
3. Secondary school programs identified by a state-level partnership recognized by the State Scholars Initiative of the Western Interstate Commission for Higher Education (WICHE) of Boulder, Colorado.
4. A program for a student who completes at least two courses in the International Baccalaureate (IB) Diploma Program with a score of four or higher on the course examinations or at least two Advanced Placement (AP) courses with a score of three or higher on the College Board's exams for those courses.
5. A secondary school program in which a student completes, at minimum:
• Four years of English;
• Three years of math, including algebra I and a higher level class such as algebra II, geometry, or data analysis and statistics;
• Three years of science, including one year each of at least two of the following courses: biology, chemistry, and physics;
• Three years of social studies; and
• One year of a language other than English.

For each calendar year, the Secretary publishes a list of all rigorous secondary school programs of study. Click here for the list of rigorous secondary school programs for each year of graduation.

PLUS Loans (Parent Loans)

Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS Loans are available through the Federal Family Education Loan Program^SM (FFELP^SM) and the William D. Ford Federal Direct Loan (Direct Loan) Program. Your parents can get either loan, but not both, for you during the same enrollment period. They also must have an acceptable credit history.

How do my parents get a loan?

For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your schools financial aid office.
For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from your school, lender, or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.


Also, your parents generally will be required to pass a credit check. If your parents don't pass the credit check, they might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if your parents fail to do so. Your parents might also qualify for a loan without passing the credit check if they can demonstrate that extenuating circumstances exist. You and your parents must also meet other general eligibility requirements for federal student financial aid.

How much can my parents borrow?

The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid, your parents can borrow up to $2,000.

Who gets my parents' loan money?

Either the U.S. Department of Education (for a Direct PLUS Loan) or your parents lender (for a FFEL PLUS Loan) will send the loan funds to your school. Your school might require your parents to endorse a disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, your parents will receive the amount as a check or in cash, unless they authorize the amount to be released to you or to be put into your school account. Any remaining loan funds must be used for your education expenses.

What's the interest rate?

For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed (at 7.90 for Direct PLUS Loans and 8.50 percent for FFEL PLUS Loans). For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July 1 of every year. For 2009-2010, the variable rate for these PLUS Loans (in both the Direct and FFEL programs) is 3.28percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.

Other than interest, is there a charge to get a PLUS Loan?

Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a FFEL PLUS Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the PLUS Loan Program in your state) to help reduce the cost of the loans. For a Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they dont make their loan payments when scheduled.

When do my parents begin repaying the loan?

For PLUS loans made to parents that are first disbursed on or after July 1, 2008, the borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or wait until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.

How do my parents pay back these loans?

They'll repay a FFEL PLUS Loan to a private lender or loan servicer. They'll repay their Direct PLUS Loan to the U.S. Department of Education's Direct Loan Servicing Center.

Is it ever possible to postpone repayment of a PLUS Loan?

Yes, under certain circumstances, your parents can receive a deferment on their loans.
If they temporarily cant meet the repayment schedule, they can also receive forbearance on their loan, as long as it isnt in default. During forbearance, their payments are postponed or reduced.
Generally, the conditions for eligibility and procedures for requesting a deferment or forbearance apply to both Stafford Loans and PLUS Loans. However, since all PLUS Loans are unsubsidized, your parents will be charged interest during periods of deferment or forbearance. If they dont pay the interest as it accrues, it will be capitalized (that is, added to the principal amount of the loan, and additional interest will be based on that higher amount).

Can a PLUS Loan be discharged (canceled)?

Yes, under certain conditions. A discharge (cancellation) releases your parents from all obligation to repay the loan.
Your parents PLUS Loan cant be canceled for these reasons: You didnt complete your program of study at your school (unless you couldnt complete the program for a valid reasonbecause the school closed, for example), you didnt like the school or the program of study, or you didnt obtain employment after completing the program of study.