Federal Parent Plus Loan

Parents of dependent students may apply for a Direct PLUS Loan to help pay their child's education expenses as long as certain eligibility requirements are met.

To be eligible for a Direct PLUS Loan for Parents:
  • The parent borrower must be the student's biological or adoptive parent. In some cases, the student's stepparent may be eligible.
  • The student must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional degree student, or a ward of the court.
  • The parent borrower must not have an adverse credit history (a credit check will be done). If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so.
  • The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the federal student aid programs.
How does a parent get a loan?

For a Direct PLUS Loan, the parent must complete a Direct PLUS Loan Application and Master Promissory Note (MPN). The MPN is a legal document in which the borrower promises to repay the loan and any accrued interest and fees to the lender. It also explains the terms and conditions of the loan. In most cases, one MPN can be used for loans that a parent receives over multiple academic years, although a separate Loan Request must be filed for each school year. If the parent previously signed an MPN to receive an FFEL PLUS loan, he or she will need to sign a new MPN for a Direct PLUS Loan.

How much can a parent borrow?

The annual limit on a PLUS loan is equal to the student's cost of attendance minus any other financial aid the student receives.

What's the interest rate?

The interest rate is fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.

When does the parent begin repaying the loan?

The repayment period for a Direct PLUS Loan begins when the loan is fully disbursed, and the first payment is due 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment:

  • while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and
  • for an additional six months after the student ceases to be enrolled at least half-time.

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