Federal Direct Parent Loan for Undergraduate Students (PLUS) is available to the parent(s) of classified dependent students who are enrolled at least half-time (6 credits) to help pay the cost of their educational expenses. PLUS loans can help pay for education expenses not covered by other financial aid. These loans are typically awarded to students who do not demonstrate financial need or may be used to supplement a Federal Direct Stafford loan. Repayment of the PLUS loan begins 60 days after the loan is fully disbursed.
- The parent (biological, adoptive, or in some cases, stepparent) of a dependent undergraduate student enrolled at least half-time
- The parent must not have an adverse credit history; and
- Student must meet all general eligibility requirements for federal student aid.
The interest rate on Federal Direct PLUS Loans is variable/fixed rates. Each year the index rate is determined as the “high yield of the 10-year Treasury note” auctioned at the final auction held prior to the June 1 preceding the July 1 of the year for which the rate will be effective, + 4.60% capped at 8.25%. Once calculated it will be fixed for the life of that loan. Example: Effective 07/01/2014 the index rate is 2.612% + 4.60% = 7.21% and it will be fixed. Any new loans may have a different interest rate and will be fixed for the life of that loan.
The following are current/past interest rates:
|School Year (July 1 – June 20)||Interest Rate|
There is a loan fee on all Direct Parent PLUS Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed.
4.248% deducted proportionately from each loan disbursement effective for loans first disbursed 10/01/18 – 09/30/19.
4.264% deducted proportionately from each loan disbursement effective for loans first disbursed 10/01/17 – 09/30/18.
The fee goes to the government to help reduce the cost of the loans. Repayment begins six months from the date of graduation, withdrawal, or enrollment of less than half-time. There is no prepayment penalty.
The Master Promissory Note
If your parent(s) wishes to obtain a Federal Direct PLUS Loan, your parent must complete a Federal Direct PLUS Loan Application and Master Promissory Note (MPN) confirming that he/she will repay funds that they borrow under this loan program. The MPN eliminates the need to complete a promissory note every year to receive additional loans (in most cases). Your parent will actively confirm the amount of loan funds requested for each academic year by completing the Direct PLUS Loan Request.
Annual PLUS Loan Eligibility based on the following equation:
Cost of Attendance (COA) – Financial Aid Resources = PLUS eligibility
For example: $5,000 COA – $3,000 Financial Aid = $2,000 PLUS eligibility
For more information, see Financial Aid Cost of Attendance.
Apply for a Federal PLUS Loan
If your parent is interested in borrowing a Federal Direct PLUS Loan you must file a Free Application for Federal Student Aid or FAFSA. Additionally, your parent will need to go online to complete the Federal Direct PLUS Loan Request and the Federal Direct PLUS Master Promissory Note (MPN) at the studentloans.gov site. For more information on student loans, please go to the Federal Student Aid website: https://studentaid.ed.gov/sa/types/loans