What is a Direct PLUS Loan?
Direct PLUS Loans are low-interest loans for parents to help pay for the cost of a student’s education. The lender is the US Department of Education. Students cannot apply for PLUS loans. Only those who qualify as a parent can apply.
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 student who is enrolled at least half-time. 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 must complete a credit check with the US Dept of Education.
- You and your child 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.
- Your child must complete the Free Application for Federal Student Aid (FAFSA).
How do I request a Direct PLUS Loan?
To apply for a Direct PLUS Loan you need to complete the Direct PLUS Loan Request and Master Promissory Note (MPN) at www.studentloans.gov. The MPN explains the terms and conditions of your loan and is your legally binding agreement to repay your loan to the Department. In most cases, one MPN can be used for loans that you receive over multiple academic years; a separate Loan Request must be filed for each school year. You will need to know your FAFSA PIN to apply. You can apply for a PIN or retrieve a forgotten PIN at www.pin.ed.gov.
I need help completing my PLUS Loan Application or Master Promissory Note. Who should I contact for assistance?
Contact the Direct Loan Applicant Services Center at 800-557-7394 for questions regarding the studentloans.gov web site, PLUS loan requests, completing the Master Promissory Note, credit check appeals, using an endorser and any other questions about the application process. The school cannot resolve application issues for borrowers. The US Dept of Education requires borrowers to resolve application issues directly and have agents on staff to assist you. Please call them.
How much can I borrow?
You may borrow the cost of your child’s education minus any other financial aid received, such as a Direct Subsidized or Unsubsidized Loan. The school will determine the actual amount you may borrow at certification.
What is the interest rate?
The interest rate for Direct PLUS Loans is a fixed rate of 7.9%. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan’s first disbursement.
When do I have to begin repaying my loan?
The repayment period for a Direct PLUS Loan begins 60 days after the school receives the last installment of the loan for that school year. This means that you generally must begin repayment while your child is still in school. However, you may be able to defer making payments while your child is enrolled. If you wish to defer your payments, make sure to select the deferment option when you complete the Master Promissory Note or call the Direct Loan Servicing Center at 800-848-0979. The school cannot defer your payments for you.
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 monthly payment amount will be based on how much you borrowed and how long you take to repay.
Can I transfer the loan to my child for repayment?
No. A Direct PLUS Loan made to a parent cannot be transferred to a student. You are responsible for repaying a Direct PLUS Loan.
What happens if I am denied for the Direct PLUS loan?
Your student may be eligible for additional Unsubsidized Direct Loan funding if you are denied a PLUS loan ($4000/yr for freshman and sophomores; $5000/yr for juniors and seniors.) You may also reapply with an endorser or request a credit check appeal. Contact Direct Loan Applicant Services Center at (800) 557-7394 for more information on endorsers or credit check appeals. Any person who qualifies as a parent (see above) may apply; applications are not limited to the parent who completes the FAFSA.
I have been approved for a PLUS loan. Do I have to notify the school?
No. The US Dept. of Education will send a certification request to the school once you complete the Loan Request and Master Promissory Note. The school will determine the actual amount you may borrow at that time. Your child will receive an updated award letter with the PLUS loan amount after certification. You do not have to borrow your full eligibility and may request a loan reduction in writing any time before the loan disburses. Please allow the school 7 – 10 business days to certify your loan after it is approved.
It has been more than 10 business days since I was approved. Why isn’t my loan certified yet?
You must complete BOTH the Loan Request and Master Promissory Note before your loan can be certified; they are two separate steps. The school will not certify your loan until both are complete.
Direct Loan contact information:
To complete a Loan Request and Master Promissory Note: www.studentloans.gov
Apply for or retrieve forgotten PIN: www.pin.ed.gov
Direct Loan Applicant Services Center (application and web site questions): (800)557-7394
Direct Loan Servicing Center (loan repayment and deferments): (800)848-0983
Help us help you! The school cannot complete loan requests or MPNs, resolve application problems, retrieve PINS, change repayment options or set up loan deferments. Please contact the appropriate departments listed above for the speediest resolution to those issues.