Parents of dependent students deemed by the FAFSA application may apply for loans to supplement their child’s financial aid. The parent may borrow funds to cover up to the full cost of attendance. Parent PLUS loans are the financial responsibility of the parents, not the students. Also, it should be noted that students who are selected for verification must complete the verification process before any aid, including the PLUS loan, can be applied to their account.
Parents may apply for a PLUS loan if:
- They are United States citizens or eligible non-citizens.
- 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.
Loans are disbursed to the student after fees have been deducted from the total loan amount. The following example uses fee rates from FY 2018.
- Loan Amount
- Fee Percentage
- Fee Amount
- Net Amount
- $9,572.40 disbursed to the student
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 the 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 Parent Direct PLUS Loan.
Please note, the student must be enrolled in school at least half-time (minimum six 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 two-step process:
- Visit the Student Loan website 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.
- If the Student is the borrower on the PLUS application, the application is invalid and nothing will happen with the application.
- Please note the PLUS loan credit expires 180 days after the approval date.
- In order for the approved loan to be certified by our office, we must have the approved PLUS application and signed MPN completed before the end of the semester to which the PLUS loan applies.
If you have received a refund after all your loans have been disbursed, the following options are available:
- Students can keep the refund and use for winter or summer classes and/or spring books.
- 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).
- 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: