Federal Direct Parent PLUS Loan

The Federal Direct Parent PLUS Loan is a credit-based, federal loan for parents of dependent students.  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.  Because the PLUS loan is in the parent’s name, they are the financial responsibility of the parents and not the student.

In addition to this website, there are additional tools to assist you with the application process:

• The 2022-2023 Federal Direct Parent PLUS Loan Steps and FAQ document
• The 2023-2024 Federal Direct Parent PLUS Loan Steps and FAQ document
• https://studentaid.gov/understand-aid/types/loans/plus/parent
• https://studentaid.gov/sites/default/files/direct-loan-basics-parents.pdf

Eligibility

The Parent borrower must be the student's biological parent, adoptive parent, or the student's step-parent (if the step-parent information was provided on the FAFSA). The student for whom the PLUS loan is being borrowed must be a dependent student who is enrolled at least half-time and making Satisfactory Academic Progress (SAP).  In addition, parents and their student must be U.S. citizens or eligible non-citizens with a domestic address.  PLUS Loans are not processed until the student's other financial aid has been awarded.

The parent borrower must pass a credit check that indicates they do not have adverse credit history to be eligible for the loan.  The U.S. Department of Education makes the credit decision (not UW-W) and they define adverse credit history 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 parent may choose among the following options:

• Appeal the credit decision – details on how to appeal will be provide on StudentAid.gov if you select this option
• Obtain an endorser (co-signer) – if this option is selected, the endorser must complete the “Endorse Direct PLUS Loan” section by signing into StudentAid.gov with their own FSAID.
• Not pursue the PLUS loan – if this option is selected, 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 we will not be able to process your PLUS Loan application.

Application Deadlines

The PLUS Loan Application becomes available by the end of the May prior to the start of fall term, and we recommend all these steps be completed prior to August 1 for the fall term (or prior to December 1 for spring term).  We cannot guarantee funds will arrive before the tuition date if an application is received less than 30 days before the start of the term. 

Application Process

The Parent PLUS Loan program does not allow a student to apply for funds as the borrower. A parent must complete the PLUS Loan process for the appropriate aid year and a new application must be completed every year the parent wishes to borrow a PLUS Loan.  Parents can must submit their PLUS Loan application online and will receive an instant credit check decision.

Outlined below are the steps to obtain a PLUS loan for the 22-23 Academic Year:

1. PLUS Loan Application (required by the U.S. Department of Education)
2. Master Promissory Note (required by the U.S. Department of Education)

 These steps are completed online at StudentAid.gov.

Step 1: PLUS Loan Application

All Federal Parent PLUS Loan borrowers must complete the PLUS Loan Application to receive their loan.  This annual application must be completed every year you wish to receive a loan. 

Follow the steps below to complete the PLUS Loan Application:

1. Go to StudentAid.gov using Chrome, Safari, or FireFox (they do not recommend using Internet Explorer).
2. Click on “Log In” using the parent borrower’s Federal Student Aid ID (FSA ID).
   • This is the same FSA ID the parent used to file the FAFSA.
   • Be sure to log in as the parent and not the student or someone else; you must log in using the parent’s FSA ID.
3. From the “Loans and Grants” menu at the top of the page, select “PLUS Loans: Graduate Grad PLUS and Parent PLUS.”
4. In the “I am a Parent of a Student” box, click on “Learn More” and then “Start.”
5. From there, follow the on screen directions. 

Step 2: Master Promissory Note

All first-time Federal Parent PLUS Loan borrowers must complete a Master Promissory Note (MPN) to receive their loan.  The MPN is the agreement you sign indicating you realize the Federal Direct Loan is a loan that you must repay. 

Follow the steps below to complete the MPN:

1. Go to StudentAid.gov using Chrome, Safari, or FireFox (they do not recommend using Internet Explorer).
2. Click on “Log In” using the parent borrower’s Federal Student Aid ID (FSA ID).
   • This is the same FSA ID the parent used to file the FAFSA.
   • Be sure to log in as the parent and not the student or someone else; you must log in using the parent’s FSA ID.
3. From the “Loans and Grants” menu at the top of the page, select “Master Promissory Note (MPN).” 
4. Select “Start” pin the "I'm a Parent of and Undergraduate Student" box and enter the information requested.
5. Once done with all sections of the MPN, be sure to click on “Submit.”

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:

1. 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.
2. You have been placed in collection or charged off (written off) during the two years preceding the date of the credit report.
3. During the five years preceding the date of the credit report, you have been subject to:
   • A default determination
   • Discharge of debts in bankruptcy
   • Foreclosure
   • Repossession
   • Tax lien
   • Wage garnishment
   • Write-off of a federal student aid debt

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 StudentAid.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 or your child's student account and details on your future income, financial aid, and living expenses if known.

Once you have logged into StudentAid.gov, select “Apply for Aid” and then “Complete PLUS Credit Counseling.”

Interest Rate

Interest rates are 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, 2022 - June 30, 2023: 7.54%
• The rate for loans disbursed from July 1, 2021 - June 30, 2022: 6.28%
• The rate for loans disbursed from July 1, 2020 - June 30, 2021: 5.30%
• The rate for loans disbursed from July 1, 2019 - June 30, 2020: 7.08%
• The rate for loans disbursed from July 1, 2018 - June 30, 2019: 7.6%
• The rate for loans disbursed from July 1, 2017 - June 30, 2018: 7.00%
• The rate for loans disbursed from July 1, 2016 - June 30, 2017: 6.31%

For prior interest rate information, visit StudentAid.gov

Loan Fees

Loan fees are deducted from each loan disbursement:

• The fee is 4.228% for loans with a first disbursement date on or after 10/1/2020 and before 10/1/2023.
• The fee is 4.236% for loans with a first disbursement date on or after 10/1/2019 and before 10/1/2020.
• The fee is 4.248% for loans with a first disbursement date on or after 10/1/2018 and before 10/1/2019.
• The rate is 4.264% for loans with a first disbursement date on or after 10/1/2017 and before 10/1/2018.

Repayment

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 StudentAid.gov website.

To estimate what your payments will be you may wish to use the following Repayment Calculator.