Parents PLUS Loan
PLUS Loans (Parent Loans)
Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependent
undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS
Loans are available through the Federal Family Education Loan (FFEL) Program and the William D. Ford
Federal Direct Loan (Direct Loan) Program. Your parents can get either loan, but not both, for you during
the same enrollment period. They also must have an acceptable credit history.
How do my parents get a loan?
For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory
note, contained in a single form that you get from your school’s financial aid office.
For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from
your school, lender, or your state guaranty agency. After the school completes its portion of the
application, it must be sent to a lender for evaluation.
Also, your parents generally will be required to pass a credit check. If your parents don't pass the credit
check, they might still be able to receive a loan if someone, such as a relative or friend who is able to
pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if your parents
fail to do so. Your parents might also qualify for a loan without passing the credit check if they can
demonstrate that extenuating circumstances exist. You and your parents must also meet other general
eligibility requirements for federal student financial aid.
How much can my parents borrow?
The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you
receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid,
your parents can borrow up to $2,000.
Who gets my parents' loan money?
Either the U.S. Department of Education (for a Direct PLUS Loan) or your parents’ lender (for a FFEL
PLUS Loan) will send the loan funds to your school. Your school might require your parents to endorse a
disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least
two installments, and no installment will be greater than half the loan amount. The funds will first be
applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, your
parents will receive the amount as a check or in cash, unless they authorize the amount to be released to
you or to be put into your school account. Any remaining loan funds must be used for your education
expenses.
Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependent
undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS
Loans are available through the Federal Family Education Loan (FFEL) Program and the William D. Ford
Federal Direct Loan (Direct Loan) Program. Your parents can get either loan, but not both, for you during
the same enrollment period. They also must have an acceptable credit history.
How do my parents get a loan?
For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory
note, contained in a single form that you get from your school’s financial aid office.
For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from
your school, lender, or your state guaranty agency. After the school completes its portion of the
application, it must be sent to a lender for evaluation.
Also, your parents generally will be required to pass a credit check. If your parents don't pass the credit
check, they might still be able to receive a loan if someone, such as a relative or friend who is able to
pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if your parents
fail to do so. Your parents might also qualify for a loan without passing the credit check if they can
demonstrate that extenuating circumstances exist. You and your parents must also meet other general
eligibility requirements for federal student financial aid.
How much can my parents borrow?
The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you
receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid,
your parents can borrow up to $2,000.
Who gets my parents' loan money?
Either the U.S. Department of Education (for a Direct PLUS Loan) or your parents’ lender (for a FFEL
PLUS Loan) will send the loan funds to your school. Your school might require your parents to endorse a
disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least
two installments, and no installment will be greater than half the loan amount. The funds will first be
applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, your
parents will receive the amount as a check or in cash, unless they authorize the amount to be released to
you or to be put into your school account. Any remaining loan funds must be used for your education
expenses.
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What's the interest rate?
For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed (at 7.90 for Direct PLUS Loans and 8.50 percent for FFEL
PLUS Loans). For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July
1 of every year. For 2007-2008, the variable rate for these PLUS Loans (in both the Direct and FFEL programs) is 8.02 percent. Interest is
charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.
Other than interest, is there a charge to get a PLUS Loan?
Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a FFEL
PLUS Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that
administers the PLUS Loan Program in your state) to help reduce the cost of the loans. For a Direct PLUS Loan, the entire fee goes to the
government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they don’t make their
loan payments when scheduled.
When do my parents begin repaying the loan?
Generally, the first payment is due within 60 days after the loan is fully disbursed. There is no grace period for these loans. Interest begins
to accumulate at the time the first disbursement is made. Your parents must begin repaying both principal and interest while you're in
school.
How do my parents pay back these loans?
They'll repay a FFEL PLUS Loan to a private lender or loan servicer. They'll repay their Direct PLUS Loan to the U.S. Department of
Education's Direct Loan Servicing Center. To read more about repayment options under both programs, read the PLUS Loans section in
Funding Education Beyond High School: The Guide to Federal Student Aid.
Information Provided by Studentaid.ED.gov
For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed (at 7.90 for Direct PLUS Loans and 8.50 percent for FFEL
PLUS Loans). For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July
1 of every year. For 2007-2008, the variable rate for these PLUS Loans (in both the Direct and FFEL programs) is 8.02 percent. Interest is
charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.
Other than interest, is there a charge to get a PLUS Loan?
Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a FFEL
PLUS Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that
administers the PLUS Loan Program in your state) to help reduce the cost of the loans. For a Direct PLUS Loan, the entire fee goes to the
government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they don’t make their
loan payments when scheduled.
When do my parents begin repaying the loan?
Generally, the first payment is due within 60 days after the loan is fully disbursed. There is no grace period for these loans. Interest begins
to accumulate at the time the first disbursement is made. Your parents must begin repaying both principal and interest while you're in
school.
How do my parents pay back these loans?
They'll repay a FFEL PLUS Loan to a private lender or loan servicer. They'll repay their Direct PLUS Loan to the U.S. Department of
Education's Direct Loan Servicing Center. To read more about repayment options under both programs, read the PLUS Loans section in
Funding Education Beyond High School: The Guide to Federal Student Aid.
Information Provided by Studentaid.ED.gov