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Federal Direct Parent PLUS Loan
The Federal Direct Parent PLUS Loan is a loan for parents of dependent students to supplement the financial aid package. The PLUS (Parent Loan for Undergraduate Students) Loan allows parents to borrow money to cover any educational costs not already covered by the student's other financial aid. PLUS loans are the financial responsibility of the parents, not the student.
The Parent borrower must be the student's biological or adoptive parent or the student's step-parent (if the step-parent information was provided on the FAFSA). Your child must be a dependent student who is enrolled at least half-time and making Satisfactory Academic Progress (SAP). In addition, parents and their child must be U.S. citizens or eligible noncitizens with a domestic address. PLUS Loans are not processed until the student's financial aid has been awarded.
To be eligible for a PLUS Loan, the parent must pass a credit check that indicates they do not have adverse credit history. For the PLUS loan, adverse credit history is defined as being 90 or more days delinquent on any debt or having any debt within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.
If a parent is denied a PLUS loan, the Financial Aid Office will proceed based on the parent's preference as indicated on the PLUS Loan application. Parents may appeal the credit decision, find a co-signer, or the student may borrow additional Unsubsidized Loan based on annual loan limits.
The Parent PLUS Loan program does not allow a student to apply for funds as the borrower. A parent must complete the PLUS Loan Request process for the appropriate aid year. A new application must be completed every year the parent wishes to borrow a PLUS Loan. Parents can now submit their PLUS Loan application online and receive an instant credit check decision. (See below for instructions on How To Apply.)
Maximum PLUS Loan
On the application, parents must indicate the amount of loan you would like to borrow. The maximum amount a parent is eligible to borrow is indicated on the student's Award Notification. This amount is based on the student's Cost of Attendance minus other financial aid. The Cost of Attendance includes expenses which every student will not incur, so it is important to formulate your own individual budget to calculate the amount of PLUS you need to borrow.
How to Apply
- Parents who wish to apply for the loan need to complete the PLUS Request Process online at www.studentloans.gov after determining the amount they would like to borrow.
- The parent will need to sign in using their own FSAID issued by the Department of Education. If you do not have an FSAID, you can apply for one at fsaid.ed.gov. Once you have signed in, select "Request Direct PLUS Loan" to begin the application.
- Complete the application by filling in the requested information. A credit check will be performed and results will be displayed immediately. If your application is approved, you will be notified when to complete "PLUS Loan Master Promissory Note". (Master promissory notes are not available to sign until mid-July before the school year begins.) Your loan information will be sent to our office for additional processing.
Adverse Credit Definition
The U.S. Department of Education serves as the lender for all parent PLUS loans. As your lender, the U.S. Department of education may determine that you as the borrower have an adverse credit history.
A credit history is a summary of your financial strength, including your history of paying bills and your ability to repay future loans. To qualify for a PLUS loan, you cannot have an adverse credit history. Your credit history may be considered adverse if you are experiencing any of the following credit conditions:
- You have one or more debts with a total combined outstanding balance greater than $2,085 that are 90 or more days delinquent as of the date of the credit report.
- You have been placed in collection or charged off (written off) during the two years preceding the date of the credit report.
- During the five years preceding the date of the credit report, you have been subject to:
- A default determination
- Discharge of debts in bankruptcy
- Tax lien
- Wage garnishment
- Write-off of a federal student aid debt
Denied Credit Check Options
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Direct PLUS Loan by obtaining an endorser who does not have an adverse credit history or documenting to the U.S. Department of Education's satisfaction extenuating circumstances relating to your adverse credit history. The endorser cannot be the child on whose behalf you are borrowing.
If your credit check has been denied, you will be given the following options:
- Appeal the decision. Details on how to appeal are given on the site. Appeals are reviewed by the Department of Education.
- Obtain an endorser (co-signer). If you choose this option, the endorser must complete the "Endorse Direct PLUS Loan" section by signing in to www.studentloans.gov using his or her own FSAID.
- Not Pursue the PLUS Loan. If you select this option, we will automatically offer your student additional Unsubsidized Direct Loan funds based on the maximum amount allowed. (Freshman/Sophomore - $4,000 max; Junior/Senior - $5,000 max.)
- Undecided. If this option is selected the Financial Aid Office will not be able to complete the PLUS loan process or award additional unsubsidized loan to the student until we are contacted by the parent who has applied for the loan.
* If you apply for a Direct Plus Loan and are notified that you have an adverse credit history, you will be given detailed information on the options for qualifiying by obtaining an endorser or submitting documentation of extenuating circumstances, along with instructions on how to complete the required PLUS counseling.
PLUS Loan Counseling is required for parents seeking to appeal or obtain an endorser due to adverse credit. Parents must log in to studentloans.gov using their own FSAID to complete PLUS Counseling. Use of another person's FSAID constitutes fraud. Use only your own FSAID information. PLUS Loan Counseling takes approximately 15-20 minutes to complete.
Before completing counseling you may want to have details on your income, financial aid, and living expenses. This includes information from your's or your child's student account information and details on your future income, financial aid, and living expenses if known.
Once you have logged into studentloans.gov, select "Complete Counseling" on the left hand navigation bar. Select "PLUS Counseling" under "Choose Counseling Type"
Master Promissory Note (MPN)
First time borrowers must complete a Master Promissory Note (MPN). The MPN is a legal document in which the borrower promises to repay his/her loans and any accrued interest. It also explains the terms and conditions of the loan. If you are borrowing for more than one student, you must complete a separate MPN for each student. To complete an MPN online, the borrower will be required to use a Department of Education issued FSAID number. If the borrower does not have a FSAID number, they can apply for one at fsaid.ed.gov. The website for the MPN is studentloans.gov.
Beginning with loans disbursed on or after July 1, 2013, interest rates will be established each year based on an index rate. The interest rate, once established on a loan, will be fixed for the life of that loan.
The rate for loans disbursed from July 1, 2015 - June 30, 2016: 6.84%
The rate for loans disbursed from July 1, 2014 - June 30, 2015: 7.21%
The rate for loans disbursed from July 1, 2013 - June 30, 2014: 6.41%
Loans disbursed from July 1, 2006 to June 30, 2013 held a fixed rate deteremined by Congress. For prior interest rate information, visit studentaid.ed.gov
Loan fees are deducted from each loan disbursement. The fee is currently 4.292% on PLUS Loans disbursed after October 1, 2014. The fee will change to 4.272% for PLUS Loans disbursed after October 1, 2015. This is due to federal budget cuts known as the sequester.
After the Direct Loan is disbursed to the student, the loan is assigned to one of the Federal Direct Loan Servicers. The Loan Servicer will send periodic statements to the borrower regarding their loan status. Repayment begins 60 days after the funds are fully disbursed, and the standard repayment term is 10 years. Parents have the option to defer payments on the PLUS loan while the student is in school and for a six-month grace period after the student graduates or drops below half-time enrollment. Please be aware the interest continues to accrue while deferred and is capitalized when the loan enters repayment. We recommend the parent at least pay the interest while in deferment. For questions on deferment, forbearance, or loan payments, contact your Loan Servicer. If you need help contacting your Loan Servicer, visit the National Student Loan Data System (NSLDS) website.
To estimate what your payments will be you may wish to use the following Repayment Calculator.