The Federal Direct Parent Loan for Undergraduate Students (PLUS) enables parents to borrow for their dependent undergraduate children. These loans are based on credit, not on need. However the maximum amount borrowed may not exceed the difference between the school's determination of the cost of attendance and assistance received, including scholarships and other benefits. Students must first apply for a Federal Pell Grant and/or Federal Direct Stafford/Ford Loan before they can be considered for a Federal Direct PLUS Loan.
The PLUS Loan has no interest subsidy and should be regarded as a last resort for most students. Interest is currently set at 7.9%. If you want to borrow this loan, have the student accept the loan on the award letter and write in the amount they would like to borrow (if it differs from the amount we suggested). The parent borrower will sign the promissory note electronically at http://dlenote.ed.gov. and will need to complete a supplementary application form we will send to the student. Once the application and promissory note are returned to us, a credit check will be performed by the government's direct loan servicer. The parent borrower will be notified of the credit approval or denial.
Repayment of the PLUS loan begins 60 days after the full amount borrowed for the school year has been fully disbursed. Loans borrowed through the Federal Direct Loan Programs are borrowed directly from the federal government. The university will coordinate all paperwork for you (see Completing Paperwork for Loans). Repayment arrangements are handled by the Direct Loan Servicer (a servicer contracted by the federal government).
How much do I repay each month?
The amount you repay depends on how much you borrowed, your interest rate and how many years you will repay the loan. You can put this amount into the Direct Loan Repayment Calculator to get the amount of your monthly repayment.
Are there different payment plans?
The Parent Loan program has different payment plans you can choose from in repaying your loan. Generally, you'll have from 10 to 30 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. You may choose one of four repayment plans:
You can change plans at any time. There's no penalty if you make payments before they are due or pay more than the amount due each month.
Where do I repay my loans?
If you have a Direct Stafford/Ford loan, you repay your loan to the Direct Loan Servicer.