Federal Direct PLUS Loans for Undergraduates
The Federal Direct Parent Loan for Undergraduate Students (PLUS) is a non-need based loan available to parents of dependent students. There is no established annual maximum a parent may borrow on behalf of each dependent child; however, the loan amount cannot be greater than the difference between the student’s cost of attendance and his or her other estimated financial aid. There are no lifetime borrowing limits in the Direct PLUS program. Direct PLUS borrowers are subject to a credit check to determine credit worthiness.
Graduate PLUS Loans
The student borrower must meet the general requirements listed below.
- Student must have filed a Free Application for Federal Student Aid (FAFSA).
- Student must be matriculated in a degree program.
- Student must be registered on at least a half-time basis (6 credits per term).
- Student must maintain satisfactory academic progress.
- Student must not be in default on a federal educational loan or owe an overpayment on an educational grant.
- Student borrower must have a satisfactory credit history as determined by the federal loan servicer.
- Student borrower and student must be a U.S. citizen or eligible noncitizen.
The Department of Education will check your credit when you apply for the loan. If you are found to have an adverse credit history, you may still borrow a Direct PLUS Loan if you get an endorser who does not have such a history. An endorser is someone who agrees to repay the loan if you do not. In some cases, you may also be able to obtain a Direct PLUS Loan if you document to the Department of Education’s satisfaction that there are extenuating circumstances related to your adverse credit history.
Students who are interested in borrowing a Direct PLUS Loan may complete the Direct PLUS Request Process at www.studentloans.gov. Student borrowers will be able to do the following:
- Complete a Direct PLUS application.
- Receive an instant credit decision.
- Appeal the credit check decision during the application process.
- Complete the Federal Direct PLUS Master Promissory Note (MPN) (new borrowers only).
- Have an endorser co-sign an application.
We strongly recommend that you complete the Direct PLUS application process online at www.studentloans.gov, as this will significantly speed up processing of your loan. In the event that you do not wish to complete the process at www.studentloans.gov, you may request a paper form from the Financial Aid Office. New borrowers must also complete an MPN at www.studentloans.gov or request a paper MPN from the Financial Aid Office. Borrowers should be aware that their loan will be submitted to the National Student Loan Data System (NSLDS) and will be accessible by authorized agencies, lenders, and institutions.
INTEREST AND FEES
Loans first disbursed on or after July 1, 2022 and before June 30, 2023 have a fixed interest rate of 7.54% as well as a origination fee of 4.228%. The origination fee is charged by the federal government and is applied to the principal amount of the loan.
The repayment period for Federal Direct PLUS loans begins on the day the loan is fully disbursed. Unless the borrower requests an in-school deferment, the first payment of interest and principal is due 60 days after the loan is fully disbursed. An in-school deferment allows repayment to begin six months after the student ceases to be enrolled on at least a half-time basis. Deferment of Federal Direct PLUS loans is for principal only; interest continues to accrue and the borrower must pay all of the accrued interest on the loan after it is disbursed.
With the standard plan, you’ll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you’ll have up to 10 years to repay your loans.
To be eligible for the extended plan, you must have more than $30,000 in Direct Loan debt, and you must not have an outstanding balance on a Direct Loan as of October 7, 1998. Under the extended plan, you have 25 years for repayment and two payment options: fixed or graduated. Fixed payments are the same amount each month, as with the standard plan, while graduated payments start low and increase every two years, as with the graduated plan below.
With this plan your payments start out low and increase every two years. The length of your repayment period will be up to ten years. If you expect your income to increase steadily over time, this plan may be right for you. Your monthly payment will never be less than the amount of interest that accrues between payments.
Please use the link to estimate your monthly payment on each of the above plans.
You must repay your loan even if the student doesn’t complete or can’t find a job related to his or her program of study, or if you are unhappy with the education you paid for with your loan.
However, the Department of Education may discharge (forgive) your loan if you: (a) have your loan discharged in bankruptcy, (b) die, and/or (c) you become totally and permanently disabled.
For more information on discharge/cancellation,
please visit: studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation.