Federal Parent Loans (PLUS)
- They are a United States citizen or eligible non-citizen
- They are not in default on a federal student loan
- They do not owe a refund on a federal education grant
Eligibility for a Direct PLUS loan is determined by a credit check. Parents determined to have adverse credit will not be approved. Parents who are denied a PLUS loan may apply with a qualified endorser. An endorser is someone who agrees to repay the loan if you do not repay it.
Only one parent needs to apply for a PLUS loan. If a parent is denied a PLUS loan, a student will be eligible to receive the additional Unsubsidized Stafford Loan that an independent student would be eligible for.
The custodial parent and the noncustodial parent are eligible to borrow from the PLUS loan program, provided the combined amounts borrowed do not exceed the cost of attendance.
Legal guardians, siblings and grandparents are not eligible to borrow from the PLUS loan program.
PLUS loans have an origination fee of 4.276% and a fixed interest rate of 7.00% for those loans disbursed on or after July 1, 2017.
|Loan Year||Fee||Gross amount||Net amount|
First disbursed on or after
July 1, 2017 and before
July 1, 2018
$427.60 fee amount
$9,572.40 Net loan amount after fee.
This is what will actually be disbursed to the
student's account For a $10,000 loan that
the parent applies for.
Repayment begins within 60 days after disbursement. Parent PLUS loan borrowers may choose to have repayment deferred (postponed) while the student, for whom the parent borrowed, is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower. The repayment term is up to 10 years. Unless requested, there is no six month grace period. Payments can be deferred if the parent is in school themselves. Please note, since the interest rate is not subsidized, it will continue to accrue and will be capitalized when the loan enters repayment.
The student must complete a FAFSA application to be considered for Federal aid including the Direct Parent PLUS Loan.
Please note, the student must be enrolled in school at least half-time (minimum 6 credits a semester) to be eligible for the PLUS loan.
REMEMBER: The loan has a 4.276% origination fee so if you are looking to cover the exact balance of the tuition bill, please make sure to apply for 4.276% more than the exact amount or you will be short by this percentage.
The PLUS loan is a 2 step process:
- Go to www.studentloans.gov, and the Parent must sign in with their FSA ID
- Select "Apply for a Direct PLUS loan"
- Under the Direct PLUS Loan Request for Parent Borrowers section towards the bottom, select Direct PLUS Loan Application for Parents > "START"
- Make sure the Parent is the borrower and the Student is in the student section.
- If the Parent is approved, that parent must complete a master promissory note as well
- Select "Complete Loan Agreement (Master Promissory Note)"
- Select PLUS MPN for Parents > "START"
- Make sure the parent's information is in the borrower section
Step by Step Parent PLUS Loan Process
If you have received a refund after all your loans have been disbursed the following options are available:
1. Students can keep the refund and use for winter or summer classes and/or spring books.
2. Student can cash the check and then repay the lender or servicer in the same amount or a lesser amount (if you need some of the funds for educational expenses).
3. Student can request a reduction of the loan for the upcoming semester.
If you need more information about the Direct PLUS Loan program, please visit these sites:
Parent Sites from the Federal Government:
- Department of Education
- Student Aid