The Federal Direct Parent Loan for Undergraduate Students (also known as a Parent PLUS loan) is a credit-based loan available to parents of dependent undergraduate students. Students will not have this loan offered as a part of their financial aid package; a separate application is required by the parent.
Available to credit-worthy parents of dependent undergraduate students who have submitted a FAFSA, regardless of financial need. To be approved, the parent must not have an adverse credit history.
What is considered "adverse credit"?
For purposes of qualifying for a Parent PLUS loan, you're considered to have an adverse credit history if:
- 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, or that have been placed in collection or charged off (written off) during the two years preceding the date of the credit report; or
- 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, or
- write-off of a federal student aid debt.
Students are considered to be independent if they are: at least 24 years old; married; have children; a graduate student; a veteran; a member of the armed forces; an orphan, ward of the court, or homeless. If none of those apply, they are considered dependent students.
Options if Denied:
If you are denied a Parent PLUS loan because of adverse credit, you may:
- reapply with a credit-worthy endorser (cosigner),
- appeal the denial with the Department of Education if there are extenuating circumstances related to your credit history that you can document, or
- contact us, as your student may be eligible for an additional $4,000 or $5,000 Federal Direct Unsubsidized loan (depending on year in school).
Maximum Loan Amount:
Up to the student's total cost of attendance, minus all other financial aid.
- For loans borrowed during the 2016-17 academic year: 6.31%
- For loans borrowed during the 2015-16 academic year: 6.84%
These interest rates are fixed for the life of the loan.
Interest accrues while the student is in school, during any grace period, and during repayment. You can pay the interest as it accrues, if you wish. If not paid, interest will be capitalized when repayment begins.
A loan origination fee is proportionately deducted at disbursement of each installment of the loan. The percentage varies depending on when the loan is first disbursed.
First Disbursement Date
On or after Oct. 1, 2016 and before Oct. 1, 2017
On or after Oct. 1, 2015 and before Oct. 1, 2016
Steps to Apply:
To apply for a Parent PLUS loan:
- The parent must sign into www.StudentLoans.gov. Then,
- Request a PLUS Loan and
- Complete a Master Promissory Note, or MPN.
(Links to both of these items are on the homepage after you log in.)
A credit check will be conducted once you begin the loan application process. If you are initially denied the Parent PLUS loan, but have since qualified by obtaining an endorser or documenting extenuating circumstances, you will also be required to complete PLUS Counseling. This can also be completed through www.StudentLoans.gov.
Once you have been approved, the Department of Education will send us a request to certify your loan. At that time, we will add it to the student's financial aid award.
Requirements to Receive Loan:
You must pass a credit check, complete a Master Promissory Note online at www.StudentLoans.gov , and remain enrolled at least half-time (6 credits or more) to receive funds. If you qualified for the Parent PLUS loan by obtaining an endorser or documenting extenuating circumstances, you will also be required to complete PLUS Counseling through www.StudentLoans.gov.
Repayment begins 60 days after the last disbursement of the loan; however, repayment can be deferred while the student is enrolled at least half-time and for an additional 6-month grace period after the student graduates. Payments are made to your Direct Loan servicer each month. The minimum payment is $50, but that amount will likely be higher depending on the total amount borrowed.
Learn more about the Federal Direct Parent PLUS loan through www.StudentAid.gov.