Federal Direct PLUS (Parent) Loans are a kind of financial aid that allows parents of dependent, undergraduate students to borrow money directly from the federal government to help pay for their student's education.
To receive a Direct PLUS (Parent) Loan, requirements exist that both parents and students must meet.
- have a good credit history
- apply for a Direct PLUS (Parent) Loan
- be approved by the federal government to receive a Direct PLUS (Parent) Loan
- complete any required promissory note
To apply for a Direct PLUS (Parent) Loan a parent must submit an electronic Direct PLUS (Parent) Loan Application, and each student for whom money is being requested must complete their FAFSA. A separate application is required for each student for whom money is being requested. If the loan is approved, the parent may also need to complete a promissory note. If one is required, the Financial Aid Office will inform the parent once the promissory note is available.
A parent can borrow up to their dependent student's cost of attendance, less any other financial aid the student has.
The interest rate for Direct PLUS (Parent) Loans paid out between July 1, 2022, and June 30, 2023, is fixed at 7.543%
- The loan origination fee for a Direct PLUS (Parent) Loan disbursed between October 1, 2021 and September 30, 2022 will be 4.228 percent of the amount borrowed.
- This fee is charged by the federal government to cover the cost of processing the loan. The federal government deducts this fee prior to the loan paying out, so the actual amount the student receives from their Direct PLUS (Parent) Loan will be less than the amount they will have to repay.
If a parent applies for a Direct PLUS (Parent) Loan but is denied, their student may become eligible to receive additional Federal Direct Unsubsidized Loans. Students who are freshmen or sophomores may become eligible to receive up to $4,000 in additional Federal Direct Unsubsidized Loans. Students who are juniors or seniors may become eligible to receive up to $5,000 in additional Federal Direct Unsubsidized Loans.
Information about loans for students and parents will be reported to the National Student Loan Data System. That information will be accessible by authorized guaranty agencies, lenders, and schools.
The US Department of Education contracts with multiple centers to provide service for the Federal Direct Loan Program. Once the first Direct PLUS (Parent) Loan is received, borrowers will be contacted by the servicer for that loan. The loan servicer will provide regular updates on the status of the Direct PLUS (Parent) Loan, and also on any subsequent Direct PLUS (Parent) Loan that are received.
Parents have two options for repaying their Direct PLUS Loan:
- Parents normally have to begin repaying their Direct PLUS Loan beginning 60 days after the full amount of their loan pays out.
- Parents may request a deferment that would allow them to postpone the start of payments until six months after their dependent student graduates, leaves school, or drops below half-time enrollment. The federal government does charge interest on the loan during periods of deferment. Parents may choose to pay the interest on the loan as it is charged or to allow the interest to be added to the balance of their loan.
For further information about your Federal Direct PLUS Loans, please visit the Department of Education's Direct PLUS Loan Basics for Parents.