General Overview

The Federal Direct PLUS Loan Program is a non-need credit-based federal loan available to the parents of dependent undergraduate students or to graduate/professional students to cover educational costs. 

There are no set borrowing limits for the PLUS loan; however you may not borrow more than the cost of attendance minus any other financial assistance received.  Through the online PLUS application process borrowers can request up to the cost of attendance or a specific loan amount.  For assistance calculating the maximum amount you may apply for or the amount needed to cover your out of pocket costs please contact our office. 

Current regulation stipulates federal loans be distributed in a minimum of two equal disbursements, except in cases of mid year graduates or transfers.  As such, PLUS requests will be scheduled to disburse evenly between the fall/spring terms or spring/summer terms for certain graduate programs with a spring term starting date.  We encourage you to calculate the amount needed for the entire academic period and apply accordingly.  On an individual basis PLUS requests can be made for single term loans. However, please be advised additional loan requests made within the academic period for a future term may result in the initialization of an additional credit check.        

Although not a requirement, parents are encouraged to have their dependent student complete a Free Application for Federal Student Aid (FAFSA), so the student can receive the maximum student financial aid they're eligible for including Stafford loans which carry more desirable terms than the PLUS loan.  Graduate/Professional students are required to complete the FAFSA and establish their Stafford loan eligibility prior to applying for the PLUS loan.

A fixed interest rate of 7.9% is charged during all periods beginning on the date of the loan's first disbursement and only on the portion of the loan which has disbursed.  Interest will not accrue on future scheduled disbursements until released.  The PLUS loan is subject to a federal origination fee of 4% minus an up-front interest rebate of  1.5%, resulting in a net fee of 2.5%, which will be deducted from the PLUS loan proceeds.  This federal fee helps reduce the cost of making these low-interest loans.

Important Borrower Terms and Conditions

Parent Eligibility Requirements for a Direct PLUS Loan

The borrower must be the student's biological or adoptive parent or the student's stepparent if the biological or adoptive parent has remarried at the time of application.  Your child must be a dependent student who is enrolled at least half-time in a degree-seeking program.  For financial aid purposes, a student is considered "dependent" if he or she is under the age of 24, unmarried, and has no legal dependents at the time the FAFSA is submitted.  Dependency exceptions are made for veterans, wards of the court, and other special circumstances.  Note: A parent is not defined as a legal guardian or other relative.   

General Eligibility & Citizenship Status Requirements for a Direct PLUS Loan

All PLUS applicants, including the dependent student in the case of a parent PLUS loan, must be a U.S. citizen or eligible noncitizen, must not be in default on any federal education loans or owe a repayment on a federal education grant, and must meet other general eligibility requirements for Federal Student Aid programs. You can find more information about these requirements including a list of eligible noncitizen statuses in Funding Education Beyond High School: The Guide to Federal Student Aid. 

Credit Criteria for a Direct PLUS Loan

The PLUS loan is a credit-based loan and by applying for the PLUS loan you are authorizing the Department of Education to check your credit history.  PLUS loan borrowers cannot have an adverse credit history.  Therefore, an applicant cannot be 90 days or more delinquent on the repayment of any debt, OR the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lein, wage garnishment or write-off of a Title IV debt during the last five years.  

If the PLUS request is denied, you, as the parent or graduate/professional student have several options:

1. Credit Override/Appeal Option:  You may request a review of the credit check due to inaccurate information on your credit report or if the denial is attributed to short-term delinquencies in mortgage payments or medical bills.  Contact the Direct Loan Applicant Services at 1-800-557-7394 for further instruction.
2. Endorser Option:  You may secure a credit-worthy endorser for your PLUS loan.  An endorser is someone who agrees to repay the Direct PLUS Loan if the borrower becomes delinquent in making payments or defaults on the loan.  Through the StudentLoans.gov site an endorser will be able to electronically endorse the PLUS loan if the borrower failed the credit check and endorse a specific loan amount which may differ from the loan amount on the PLUS request.
3. No Action Option: You do not wish to pursue the PLUS loan and would like to take no further action at this time.
4. Undecided:  You are undecided on how you would like to proceed at this time.

Provision for Additional Stafford Unsubsidized Loan 

In cases of a PLUS denial the dependent student of an ineligible parent applicant is alternatively eligibile to receive additional Stafford Unsubsidized loan funding of up to $4,000 (1st & 2nd year students with less than 60 credit hours completed) or up to $5,000 (3rd & 4th year students with 60+ credit hours completed).  The FAFSA must be completed for this option and the request for additional funding must be made by the student.  Note: The additional Stafford Unsubsidized loan provision is not available to graduate PLUS applicants who do not meet the PLUS loan credit criteria.

Master Promissory Note Completion Requirement 

Once the PLUS request is approved an electronic Master Promissory Note (eMPN) must be completed.  You will be presented with this option following the online PLUS request/credit check.  PLUS applicants approved without an endorser are eligible to apply for future PLUS loans for the same student under the same eMPN.  Applicants approved with a credit-worthy endorser will be required to complete a new eMPN for any subsequent PLUS loan requests.  Alternatively, and on an individual request basis, a paper MPN can be completed through our office.  Please note that this may cause some delay in processing as compared to the online eMPN process. 

PLUS Loan Deferment Option & Repayment Plans

The repayment period for all PLUS loans begins on the date the loan is fully disbursed, and the first payment is due within 60 days of the final disbursement.  However, a graduate student PLUS loan borrower (as well as a parent PLUS borrower who is also a student) can defer repayment while the borrower is enrolled at least half-time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time.  Parent PLUS loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time.

Interest that accrues during these deferment periods will be capitalized if not paid by the borrower.

You will have a choice of repayment plans.  How much you pay and how long you take to repay your loan(s) will vary depending on the repayment plan you choose.  There are several repayment plans available: Standard, Extended, Graduated, Income Based Repayment (IBR), and Income Contingent Repayemnt (ICR).  For questions regarding your individual options or assistance selecting the plan that is best for you, please contact the Direct Loan Servicing Center at 1-800-848-0979.