A Federal Direct Parent PLUS Loan is a loan program administered by the U.S. Department of Education. It is designed to assist parents of dependent undergraduate students in meeting their educational cost. The Parent PLUS loan can be requested to cover the full cost of attendance for an academic year less any aid the student is receiving.
What are the eligibility requirements for a parent to get a Direct PLUS Loan?
- You must be the biological or adoptive parent (or, in some cases, the stepparent) of the student for whom you are borrowing.
- Your child must be a dependent undergraduate student who is enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, your child 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.
- You cannot have an adverse credit history (a credit check will be done).
- In addition, you and your child must be U.S. citizens or eligible non-citizens (see gov/non-citizen), not be in default on any federal education loans, not owe an overpayment on a federal education grant, and meet other general eligibility requirements for the federal student aid programs.
Can more than one parent borrow a PLUS Loan?
If a student’s parents are divorced, both the custodial and non-custodial parent may borrow a PLUS Loan for their dependent, undergraduate student. A step-parent may only borrow a PLUS Loan if they are married to the custodial parent and their financial information was reported on the FAFSA of record.
How do I request a Direct PLUS Loan?
The parent applying for the Direct PLUS loan must log in (use your own FSA ID and password) and apply online at www.studentaid.gov. Once you log on follow the steps below:
- Click on Apply for a PLUS Loan.
- Click on Complete PLUS Request for Parents.
- Indicate award year (for Fall 2018 choose 1819).
- Enter your son/daughter student information.
- Review and select options wanted.
- Indicate University of La Verne as the school.
- Choose the amount wanted.
- Loan period for 1819 year is August 2018 to May 2019.
- Continue through the steps.
- If you are approved go to the “Home Page” and complete the loan agreement.
- Click on Complete Loan Agreement (Master Promissory Note).
- Click PLUS MPN for Parents.
The Office of Financial Aid will receive electronic notification of your approval and the student’s award will be updated within 7 days.
My credit was not accepted. What are my options?
- The borrower can re-apply for a PLUS loan with an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Parent PLUS Loan if the parent does not repay the loan. The PLUS Loan endorser cannot be the student. The endorser will be required to obtain a FSA ID. The endorser will then need to use a unique PLUS Endorser Code and URL provided by the borrower to complete the Endorser Addendum for the Parent PLUS Loan at www.studentaid.gov.
- The borrower may appeal the adverse credit decision if they believe extenuating circumstances may exist. Click here for more information.
- Federal Direct Unsubsidized Federal Loan. Students whose parents are denied a PLUS loan may qualify to receive additional Unsubsidized Federal Loan. Freshmen and Sophomores can receive an additional $4,000., and Juniors and Seniors can receive an additional $5,000.
Please note that if are approved through an appeal or through an endorser, you must also complete the PLUS Credit Counseling. Go back to the Home Page click on Complete PLUS Credit Counseling.
How much can I borrow?
There are no set borrowing limits for Direct PLUS Loans, but you may not borrow more than the cost of your child’s education minus any other financial aid received, such as a Direct Subsidized Loan or Direct Unsubsidized Loan. The school will determine the actual amount you may borrow.
What is the interest rate?
The interest rate for a Direct PLUS Loan is determined annually for new loans that are made between July 1 of one year and June 30 of the following year. Each loan will have a fixed interest rate for the life of the loan. View the latest interest rate information.
Is there a charge for a Direct PLUS Loan?
Yes. In addition to interest, you pay a loan fee that is a percentage of the principal amount of the loan. ED deducts the fee before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay. View the latest interest rate information.
How will I receive my loan money?
Your loan money will usually be paid out after the first week of attendance. Your child’s school will generally credit the loan money to your child’s account to pay tuition, fees, and other authorized charges. Any remaining loan funds will be paid to you directly, unless you authorize the school to pay this money to your child.
When do I have to begin repaying my loan?
The repayment period for a Direct PLUS Loan begins immediately after you’ve received the last disbursement of the loan, while your child is still in school. However, you may be able to defer making payments while your child is enrolled at least half-time, and for an additional six months after your child graduates or drops below half-time enrollment status. To learn more about deferment, click here.
When it’s time for you to begin repaying your Direct PLUS Loan, you’ll make payments to your loan servicer, an organization that handles billing and other customer service functions related to your Direct PLUS Loan. The servicer will contact you after you receive your first Direct PLUS Loan to provide you with information about repayment options, and the servicer also will communicate with you throughout the repayment period of your loan.
How much time will I have to repay my loan, and how much will I have to pay each month?
Generally, you’ll have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose. Your required monthly payment amount will vary depending on how much you borrowed, the interest rates on your loans, and your repayment plan.
The following are the available repayment plans for Direct PLUS Loans made to parents:
- Standard Repayment Plan. Under this plan, you’ll have fixed monthly payments for up to 10 years.
- Graduated Repayment Plan. Under this plan, your payments will start off lower and then gradually increase, usually every two years. You must repay the loan in 10 years.
- Extended Repayment Plan. Under this plan, you can choose to make fixed or graduated monthly payments for up to 25 years. To be eligible for this plan, you must have more than $30,000 in Direct Loan debt and you must not have already had an outstanding balance on a Direct Loan at the time you received a Direct Loan on or after October 7, 1998.
Note: You can find more information about each of the plans and use the Department of Education Repayment Estimator to estimate your monthly payment under different repayment plans.
Can I transfer the loan to my child for repayment?
No. A Direct PLUS Loan made to you as a parent cannot be transferred to your child. You are responsible for repaying the loan.
Can I ever postpone making loan payments?
Yes, under certain circumstances you may receive a deferment or forbearance, which allows you to temporarily stop or lower your payments.
You may receive a deferment in the following circumstances:
- While you are enrolled at least half-time at a school that’s eligible to participate in ED’s federal student aid programs.
- While the student for whom you obtained a Direct PLUS Loan is enrolled at least half-time at a school that’s eligible to participate in ED’s federal student aid programs.
- During the six-month period after the student for whom you obtained a Direct PLUS Loan ceases to be enrolled at least half-time.
- While you are in a full-time course of study in a graduate fellowship program.
- While you are in an approved full-time rehabilitation program for individuals with disabilities.
- While you are unemployed or meet our rules for economic hardship (for these conditions, deferment is limited to a maximum of three years).
- While you are serving on qualifying active duty in the U.S. armed forces or National Guard.
If you don’t qualify for a deferment but are temporarily unable to make loan payments for such reasons as illness or financial hardship, your loan servicer may grant you a forbearance. With forbearance, you may be able to stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments.
We charge interest on Direct PLUS Loans during all periods of deferment and forbearance. You may choose to pay the interest as it accrues during these periods to reduce the total amount you will repay on your loan. If you don’t pay the interest that accrues during a period of deferment or forbearance, it will be capitalized (added to your loan principal amount) at the end of the deferment or forbearance period.
For more information on deferments and forbearance, including specific eligibility requirements, contact your loan servicer and visit here.
Can my loan ever be canceled, discharged, or forgiven?
You must repay your Direct PLUS Loan even if your child doesn’t complete or can’t find a job related to his or her program of study, or if you or your child are unhappy with the education you paid for with your loan. However, we will discharge (forgive) your loan if:
- you become totally and permanently disabled (in accordance with ED’s definition);
- your loan is discharged in bankruptcy after you have proven to the bankruptcy court that repaying the loan would cause undue hardship; or
- you die, or the child for whom you borrowed dies.
In certain cases, we may also discharge all or a portion of your loan if:
- the school closed before your child completed the program;
- the school falsely certified your eligibility for the loan;
- your loan was falsely certified through identity theft; or
- your child withdrew from school but the school didn’t pay a refund of your loan money that it was required to pay under federal regulations.
Read more about loan discharges here.