Undergraduate Federal Direct Parent Plus Loans
A qualifying parent may receive a Federal Direct PLUS Loan for the education costs of a dependent undergraduate student who meets the eligible student definition. Additional Parent PLUS Loan information is available at studentaid.gov.
Parent eligibility for a PLUS loan depends on passing a credit check to ensure the applicant does not have an adverse credit history. The dollar amount that can be borrowed is equal to the student's cost of attendance for the academic year minus any other financial assistance received. For example, if the academic year cost of attendance is $19,000 and the student receives $10,000 in other financial assistance, a parent could borrow up to a $9,000 undergraduate PLUS loan.
Federal Direct PLUS loans typically have better terms and more flexible eligibility criteria than private alternative loans. Maximum loan fees and repayment interest rates are set by federal regulations. For loans originated between 10/01/14 and 10/01/15, Federal Direct PLUS loans are subject to a 4.292% origination fee. These fees are deducted from your loan proceeds at the time of disbursement. For loans first disbursed between 7/1/14 and 6/30/15, the Federal Direct PLUS repayment interest rate is set at a 7.21% fixed rate.
Before a PLUS loan can be processed the student must complete the Free Application for Federal Student Aid (FAFSA). A FAFSA may be completed online.
Steps for processing Parent PLUS Loans.
Step 1: Receive Your Aid Offer
A student is awarded a Federal Direct PLUS Loan and accepts the award on mavlink.
Step 2: Complete the Federal Direct PLUS Loan Request Process
The parent who completes the Direct PLUS Loan Request must have a Federal PIN number. If that parent does not have a Federal PIN, he/she may apply for one by going to the Department of Education PIN Registration site. The PIN serves as an identifier to allow you to access personal information in various U.S. Department of Education systems. The PIN also serves as an electronic signature. Effective April 26, 2015, you must use your FSA ID in lieu of the PIN. You will have the option to link your PIN to your FSA ID at this time.
Once the Direct PLUS Loan Request is completed, the parent will know immediately if approved or denied. Within 48 hours, the parent/student information and the credit decision is sent to the school.
The parent's credit is run to check for adverse credit history.
Please note: To borrow a PLUS loan for a student, the parent must be the student's biological or adoptive mother or father. A stepparent is also eligible to borrow a PLUS loan if his/her income and assets were taken into account when calculating the Expected Family Contribution (EFC). A legal guardian is not considered a parent for federal aid purposes.
If the parent applicant is determined to have an adverse credit history, the parent has the opportunity to qualify for a Direct Parent PLUS Loan by documenting extenuating circumstances in regards to the adverse credit decision (appealing the denial) or obtaining a qualified endorser. If obtaining an endorser, the endorser's credit will be run for adverse credit history and cannot be the dependent student. Effective March 29, 2015, if the Parent PLUS applicant appeals the denial or pursues a qualified endorser, the parent must complete PLUS Counseling before the Parent PLUS loan can be disbursed. PLUS Counseling is completed at StudentLoans.gov.
Step 3: Complete Your Loan Documents
The same parent who completed the Direct PLUS Loan Request must complete and sign a Master Promissory Note (MPN) for Parent PLUS Loans. The electronic version of the MPN allows a parent to complete, sign and obtain a copy of his/her MPN over the web using his/her U.S. Department of Education issued PIN.
If the same parent previously signed an MPN for a Federal Direct PLUS Loan for this son/daughter, a new MPN for the upcoming academic year is not required; the MPN signed previously is still valid and in effect. However, if an endorser was obtained, the MPN is only valid for one year.
If a parent has not previously signed an MPN for Parent PLUS Loans for this son/daughter, he/she should access the Department of Education's Student Loans website and sign a Master Promissory Note for Parent PLUS Loans. Our office will be notified once a parent has completed this process. This notification must be received before we can disburse the Federal Direct PLUS Loan to a student's consolidated billing account.
Note: As stated on the Federal Application, the Direct Parent PLUS Loan will be applied to your student's account to pay for tuition and fees as well as room and board (if applicable).
To avoid delays in processing your Federal Direct PLUS Loan, please follow these helpful hints:
- The same parent borrower who completed the Direct PLUS Loan Request must sign the MPN.
- The parent should complete the Direct PLUS Loan Request using their full legal name. Likewise, when completing the electronic MPN the parent should use their full legal name. The MPN will not 'link' to the PLUS Loan unless these items match.
- If one parent borrowed through the PLUS Loan program in a previous year and completed an MPN, and for the upcoming academic year a different parent has completed the Direct PLUS Loan Request, a new MPN is required from that parent.
- Make sure the parent borrower's AND student's Social Security Number (SSN) and Date of Birth are correct when completing the Direct PLUS Loan Request and electronic MPN.
- Eligible non-citizens must provide documentation. Acceptable documentation is the Alien Registration Card (I-551 or I-151) or the Arrival-Departure Record (I-94). Provide a copy of the front and back of the card.