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.
What must a parent and student do to be eligible for a Direct PLUS (Parent) Loan?
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
How can a parent apply for a Direct PLUS (Parent) Loan?
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.
How much can a parent borrow?
A parent can borrow up to their dependent student's cost of attendance, less any other financial aid the student has.
What is the interest rate on a Direct PLUS (Parent) Loan?
The interest rate for Direct PLUS (Parent) Loans paid out between July 1, 2019, and June 30, 2020, is fixed at 7.079 percent.
What is the loan origination fee for a Direct PLUS (Parent) Loan?
- The current loan origination fee for a Direct PLUS (Parent) Loan is 4.236 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.
What happens if a parent's application for a Direct PLUS (Parent) Loan is denied?
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.
To whom will my Direct PLUS (Parent) Loan information be disclosed?
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.
How can a parent find out who the loan servicer is for their loan?
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. To confirm which center is servicing the loan, log onto the National Student Loan Data System. To view the current servicing centers contracted by the Department of Education, click here.
When will a parent have to start repaying their loan?
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.
Where can I find additional information about Direct PLUS (Parent) Loans?
For further information about your Federal Direct PLUS Loans, please visit the Department of Education's Direct PLUS Loan Basics for Parents.