Direct PLUS Loans
are loans for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance.
Parent Eligibility Requirements for a Direct PLUS Loan
You must be the student's biological or adoptive parent or the student's stepparent. Your child must be a dependent undergraduate student enrolled at least half-time. For financial aid purposes, a student is considered "dependent" if he or she is under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid is submitted. (Exceptions are made for veterans, wards of court, and other special circumstances.)
Credit and Additional Requirements to Receive a PLUS Loan
Parent PLUS loan borrowers cannot have an adverse credit history (a credit check will be done). In addition, parents and their dependent child must be U.S. citizens or eligible non-citizens, 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.
Loan Limits, Interest Rate, and Loan Charges
There are no set 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 or Unsubsidized Loan. The school will determine the actual amount you may borrow.
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.
In addition to interest, you pay a loan origination fee that is a percentage of the principal amount of each Direct PLUS Loan that you receive. The fee is deducted before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay.
Dependent students whose parents have applied for but were unable to get a PLUS Loan are eligible to receive additional Direct Unsubsidized Loan funds.
Repayment begins 60 days after the final disbursement of each loan. The maximum repayment period is 10 years, and the minimum monthly payment is $50.00.
For additional information on the Direct PLUS Loan Program, please visit www.studentloans.gov.