Direct Plus Loan Program Benefits
Direct PLUS Loans are unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS Loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods. The school applies PLUS loan funds toward your child's educational costs such as tuition, fees, and room and board.
If any loan funds remain after school charges are paid, you will receive the remaining amount from the school, unless you authorized the school to release the funds to your child. Any funds you or your child receives must be used to pay the child's educational expenses.
Direct Plus Loan Program
The Direct PLUS Loan Program is a federal student loan program in the United States that allows parents of dependent undergraduate students and graduate or professional students to borrow funds to pay for educational expenses. The U.S. Department of Education is the lender in this program. There are two types of Direct PLUS loans:
- Parent PLUS Loans: These are loans that parents of dependent undergraduate students can take out to help pay for education expenses not covered by other financial aid. The eligibility for a Parent PLUS Loan is not based on financial need, but a credit check is required.
- Graduate PLUS Loans: These loans are available to graduate or professional students to help cover educational expenses. Like the Parent PLUS Loan, the Graduate PLUS Loan also requires a credit check but is not based on financial need.
Interest rates for Direct PLUS loans are generally higher than those for other types of federal student loans, and they are set annually by the government. Borrowers may be able to defer repayment while the student is enrolled at least half-time and for an additional six months after the student graduates, leaves school, or drops below half-time enrollment. Repayment plans for Direct PLUS loans include various options, such as standard repayment, extended repayment, graduated repayment, and income-contingent repayment plans.
Borrowers can choose a plan that best suits their financial situation. It's important to note that the terms and conditions of the Direct PLUS Loan Program may change over time, so it's crucial to check the latest information from the U.S. Department of Education or the Federal Student Aid (FSA) website for the most up-to-date details.
Who is eligible for Direct PLUS Loans?
To qualify for this program, you must:
- A) Be a parent of a dependent postsecondary student who is working toward a postsecondary degree or certificate; and
- B) Not have an adverse credit history.
There are other requirements. For more information, visit the Federal Student Aid Resources page.
Direct Home Loans For Native American Program BenefitsWhat are the loan terms for Direct PLUS Loans?
Maximum Loan Amount: Your child's cost of attendance minus other financial aid. For example, if your child's cost of attendance is $6,000, and he or she receives $4,000 in other financial aid, you can borrow up to $2,000 in PLUS Loans.
Interest Rate: The interest rate is variable (adjusted annually on July 1), but it does not exceed nine percent. You'll be notified any time the variable rate changes. For the current PLUS Loan interest rate, visit the PLUS Loan information page.
Maximum Loan Length: Up to 30 years, depending on the amount borrowed and the repayment plan chosen. There are a number of repayment plans offered through the Direct and FFEL programs. Read How to Repay Your Loans online for more information about repayment.
Frequency of Payments: Monthly or quarterly. Generally, the first payment is due within 60 days after the loan is fully disbursed. You must begin repaying both principal and interest while the student is in school.
Prepayment Penalties: None
Fees: You will pay a fee of up to four percent of the loan, deducted proportionately each time a loan disbursement is made. Because of this deduction, you'll receive slightly less than the amount you're borrowing.
| Max Loan Length | 30 years, depending on amount borrowed and repayment plan chosen |
| Interest Rate | Variable, does not exceed 8.25% |
| Max Loan Amount | $2,625 to $8,500 |
| Payment Frequency | Monthly |
| Prepayment Penalties | None |
| Max Loan Length | Up to 4% of the loan |
How do I apply for Direct PLUS Loan Program?
If your child's school participates in the Direct Loan program, you can obtain a Direct PLUS Loan application from your child's school. To apply for a FFEL PLUS Loan, you can get an application through your child's school, from a lender that participates in the FFEL program, or from the guaranty agency in your state.
Note: Although it's not a requirement, you are strongly encouraged to have your dependent child file a Free Application for Federal Student Aid (FAFSA) to see if he or she may be eligible for other student loans or grants. The student can use FAFSA on the Web, to apply (the faster and easier way), or he or she can get a paper FAFSA from his or her high school, local library, postsecondary school, or by calling the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243). TTY users for the hearing impaired can call 847-688-2567.
Clinical Research Loan Repayment Program BenefitsDocuments required for PLUS Parent Loan Program
When applying for a Parent PLUS Loan, the following documents are typically required:
- Free Application for Federal Student Aid (FAFSA): The student and parent must have a current FAFSA on file.
- Loan Application: The parent borrower must complete and submit a Direct PLUS Loan Application.
- Master Promissory Note (MPN): The parent borrower must sign a Master Promissory Note, which is a legal document that serves as a promise to repay the loan and any accrued interest and fees to the U.S. Department of Education.
- Credit Check Authorization: The parent borrower must authorize a credit check during the application process.
- Proof of Identity: The parent borrower may need to provide a valid government-issued photo ID, such as a driver's license or passport.
- Proof of Citizenship or Eligible Noncitizen Status: The parent borrower may be required to provide documentation proving U.S. citizenship or eligible noncitizen status.
- Proof of Income: Although not always required, some lenders or schools may request documentation of income to verify the borrower's ability to repay the loan.
It's important to note that the specific requirements may vary depending on the lender and the school's financial aid office. Additionally, it's advisable to check with the specific institution or lender to confirm the exact list of documents required for the Parent PLUS Loan application.
Required Eligibility for PLUS Parent Loan Program
To be eligible for a Parent PLUS Loan, the parent borrower must meet certain requirements, including:
- Parental Status: The borrower must be the biological or adoptive parent (or in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time in an eligible program at a participating school.
- Credit Check: The parent borrower must not have an adverse credit history. A credit check is conducted to determine the borrower's creditworthiness. An adverse credit history is defined as having certain negative credit history, such as significant delinquencies, defaults, bankruptcies, foreclosures, repossessions, tax liens, wage garnishments, or write-offs within the past five years.
- Citizenship or Eligible Noncitizen Status: The parent borrower must be a U.S. citizen, U.S. national, or an eligible noncitizen. Generally, the student on whose behalf the parent is borrowing must also be a U.S. citizen or eligible noncitizen.
- Compliance with Selective Service Requirements: If the parent borrower is a male, he must have registered with the Selective Service System (the military draft) if required to do so.
- Satisfactory Academic Progress (SAP): The student for whom the loan is being borrowed must be making satisfactory academic progress as defined by the school.
- Completion of FAFSA: The student and the parent borrower must have completed the Free Application for Federal Student Aid (FAFSA) to determine the student's eligibility for other forms of federal financial aid.
It's important to note that meeting these eligibility criteria does not guarantee approval for a Parent PLUS Loan. The final decision on loan approval is based on the credit check and other application requirements. If a parent is denied a PLUS loan, the student may be eligible for additional unsubsidized federal student loans.
How can I contact someone?
Additional information about PLUS Parent Loans can be viewed on the PLUS Loan information page. 1-800-433-3243.