The Federal Direct PLUS Loan is a loan in the parent’s name to assist their undergraduate dependent student when there is a gap between the cost of attendance and the student’s own financial aid.
- PLUS loans are guaranteed and regulated by the Department of Education
- Credit approval is required prior to loan origination
- If a parent is not credit approved, the student may be eligible for an additional Federal Direct Unsubsidized loan.
Loan amounts can be up to the student’s cost of attendance minus any aid that the student has received, including other loans.
For information regarding current interest rates and origination fees, please visit https://studentaid.gov/understand-aid/types/loans/plus/parent.
To apply for a Parent PLUS loan, please visit https://studentaid.gov/plus-app/parent/landing.
Who May Borrow
The biological or adoptive parent of a dependent undergraduate student who meets all the eligibility requirements may apply for a PLUS loan, even if they are not listed on the FAFSA. A step-parent, if still married to the student’s biological parent and whose income is reported on the student’s FAFSA, is also eligible to borrow on behalf of the student.
Grandparents, other relatives, or legal guardians are not eligible for the Parent PLUS loan.
- Students must have a FAFSA on file for the current academic year
- Student must be enrolled at least half-time in a degree program
- Both the student and the parent must be a U.S. citizen or an eligible non-citizen
- The student must be making satisfactory academic progress per the policies of the college
- Neither the parent or the student can be in default on their own federal student loans or owe a refund on any federal loan or grant
Credit approval for a PLUS loan will be given to anyone who does not have adverse credit. It is not based on income, the amount of loan requested, the amount of debt the family has, or the parent’s FICO score. Even parents who do not have a credit history may be approved. A parent will generally be approved for a PLUS loan as long as they do not have adverse credit.
Master Promissory Note
If the parent receives credit approval, they will also need to complete a Direct PLUS Master Promissory Note. The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees. It also explains the terms and conditions of your loan(s). By signing the MPN you are agreeing to the terms of your loan(s).
If a parent is applying for a PLUS Loan for more than one student in college, a separate note is required for each student. If more than one parent is applying for a PLUS Loan for the same student, each parent must complete a note.
What does "Adverse Credit History" mean?
A Parent PLUS loan applicant has an adverse credit history if any of the following apply or have applied in the last five years:
- In default on a Federal Direct loan
- Tax Lien
- Wage Garnishment
- Write-off of federal student aid debt
- Excessive debt that is at least ninety (90) days delinquent, in collections, or charged-off.
What are my options when I am denied a PLUS Loan?
If an applicant’s PLUS Loan application is denied, the following options are available:
- Use a credit approved endorser
- Request an appeal of the credit decision based on extenuating circumstances
- Request reconsideration if it is offered to you
- Choose not to pursue the PLUS Loan. No additional action will be taken on the credit decision and the school will be notified of the denial
Parents who are not initially credit approved for a PLUS Loan but who qualify by documenting extenuating circumstances or obtaining an endorser, must complete a PLUS counseling requirement before the loan can be originated.