What is a Parent PLUS Loan?
Parent Loans are available to credit-worthy parents of dependent, undergraduate students and can be processed for up to the cost of attendance less any financial aid the student is receiving. Federal guidelines regulate the primary features of the PLUS Loan program, eligibility for borrowing and repayment terms.
PLUS Loans are restricted to the biological or adoptive parents, as well as stepparents of a dependent undergraduate student. As of 2000, legal guardians do not qualify as parents for federal aid purposes. Students with legal guardians and no living parents qualify as independent students and may receive increased Stafford loans. In special circumstances, financial aid administrators may issue a professional judgment override. Grandparents are not considered to be parents for federal student aid purposes unless they have adopted the student. Thus, while the grandparents can cosign the parent’s Parent PLUS loan, they cannot borrow from the Parent PLUS loan program on their own.
When you apply for a Direct PLUS Loan, the U.S. Department of Education will check your credit history. To be eligible for a PLUS Loan, you must not have an adverse credit history. If you are found to have an adverse credit history, you may still borrow a PLUS Loan if you get an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay the loan. The endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan. In some cases, you may also be able to obtain a Direct PLUS Loan if you document to our satisfaction that there are extenuating circumstances related to your adverse credit history.
The Federal Direct PLUS Loan Program requires a 4.292% origination and default fee. The total fee amount is 4.292% or 95.708% of the gross loan amount. The U.S. Department of Education deducts the fees before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay.
The interest rate for Direct PLUS Loans is a fixed rate of 6.84%. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement. To find out more information on interest rates for Direct PLUS Loans, contact the Direct Loan Servicing Center at 800-557-7394.
Applying for a Federal Direct Parent PLUS Loan
There are 3 steps to applying for the Federal Direct Parent PLUS Loan. If you are a first time borrower, you must complete all three steps which will take approximately 25-30 minutes. Repeat Direct PLUS Loan borrowers who have already completed a Federal Direct Master Promissory Note for previous years need to complete step 1 and 3. No PLUS Loan will be processed until a valid credit approval has been received by the U.S. Department of Education. After the initial application, steps 1 and 3 will need to be completed for each additional PLUS Loan request.
Before you begin: Parents who wish to apply for the PLUS loan will be required to use their own FSA ID.* If you do not already have an FSA ID, you can create one here
*The FSA ID has replaced the Federal Student Aid PIN as the credential with which students, parents, and borrowers authenticate their identity to access their federal student aid information online and electronically sign Federal Student Aid documents.
Attention MAC users, you must use Internet Explorer or Firefox as your browser in order to complete your Master Promissory Note. Safari is not compatible with the Dept. of Education's website.
STEP 1: Complete the PLUS Loan Application
Please note that this step in the process is NOT the Promissory Note, it is an application where you provide information for the credit check to be done by the U.S. Department of Education. Click on the above link, sign in with your FSA ID and then click "Request a PLUS Loan". Again, the FSA ID for this process must be of the parent borrower and not the student.
STEP 2: Electronically Sign the Direct PLUS Loan Master Promissory Note (MPN)
This is a separate step from the above mentioned "PLUS Loan Application". This part of the process is collecting your electronic signature on the Promissory Note where you agree to the terms and conditions of the loan.
STEP 3: Complete your 2015-2016 Parent PLUS Loan Certification to authorize the dollar amount you wish to borrow. After the borrower has completed this form, please return it to our office so that the loan can be processed.