Federal Direct PLUS Loans for Parents

Federal Direct PLUS Loans for Parents of Dependent Undergraduates

The PLUS loan is designed for parents. You can apply for a PLUS loan only if you are the parent of a dependent student. A credit review is part of the approval process. If you are denied a PLUS loan, your son or daughter can apply for an unsubsidized loan in his or her own name.

You can apply for a PLUS loan if

• Your son or daughter attends at least half-time (6 hours).
• You have good credit history. (Parents with weak credit may be eligible with a credit-worthy co-borrower or by documenting extenuating circumstances.)
• You have completed the FAFSA.

How is the PLUS loan repaid?

As a parent, you must repay the PLUS loan

• Repayment begins 60 days after the loan is fully disbursed. Note: A parent may defer repayment until 6 months after the student stops attending fulltime. If the parent wishes to defer repayment, he/she must contact Direct Loan Servicing at 1-800-848-0979. 
• The repayment term is up to 10 years.
• There is no grace period. Interest begins when you first receive the loan
  money.

How much can you borrow with your PLUS loan?

With a PLUS loan, you can borrow up to the cost of attendance minus any other financial aid awarded.

Interest Rate

The interest rate is 7.9%.

Origination fee of 4%, reduced to 2.5%

In addition to charging interest, PLUS loans also charge a 4.0% origination fee. The fee comes out of the first funds you receive from your loan. However, you will receive a 1.5% fee rebate, instantly. This reduces the fee to 2.5% but you must make your first 12 loan payments on time or the rebate will be charged back to your loan.

Applying for a Direct PLUS Loan is a two-step process.

1. Parents first complete a Federal Direct PLUS Loan Application for Parents. The information obtained on the application allows us to complete a credit check. Please submit the application along with a copy of your social security card and driver’s license to the Office of Student Financial Aid.
2. After the application is processed along with a credit check, your parents should complete the Direct PLUS Master Promissory Note (MPN).

Parents should not complete the MPN until they receive approval from the Office of Student Financial Aid.

Federal Direct PLUS Loan Master Promissory Note (MPN).

The MPN acts as a contract between the borrower (in this case, your parents) and the U.S. Department of Education. By signing the MPN, parents promise to repay the amount loaned and agree to other important terms of the loan. The MPN must be completed so that you can receive money from the loan.

The MPN may be signed online at https://dlenote.ed.gov/empn/completenew_plus.jsp

Receiving your loan funds

Your loan money will be applied to your student's account and we will deduct any amount you owe us in tuition or fees. We mail any funds left over to your home. The parents can authorize a refund to their children using the Federal Direct Parent PLUS Borrower Refund Request Form available with the Federal Direct PLUS Loan Application for Parents.