PLUS loans can help pay for education expenses not covered by other financial aid.
PLUS loans are federal loans that graduate or professional degree students and parents of dependent undergraduate students can use to help pay education expenses. The U.S. Department of Education makes Direct PLUS Loans to eligible borrowers through schools participating in the Direct Loan Program.
Here's a quick overview of Direct PLUS Loans:
- The U.S. Department of Education is the lender.
- The borrower must not have an adverse credit history.
- Loans have a fixed interest rate of 7.9%.
- The maximum loan amount is the student's cost of attendance (determined by the school) minus any other financial aid received.
Am I Eligible For a Direct PLUS Loan?
To receive a Direct PLUS Loan, you must:
- be a graduate or professional degree student enrolled at least half-time at an eligible school in a program leading to a degree or certificate, or be the parent (biological, adoptive, or in some cases, stepparent) of a dependent undergraduate student enrolled at least half-time at a participating school; and
- meet the general eligibility requirements for federal student aid. If you are borrowing on behalf of your child, your child must also meet these requirements.
How Do I Apply For a Direct PLUS Loan?
In order to receive a Direct PLUS loan, you (or your child, in the case of parent borrowers) must complete the Free Application for Federal Student Aid (FAFSASM)sm. The school's financial aid office will provide instructions about their process for requesting a Direct PLUS Loan.
Can I Still Receive a Direct PLUS Loan if I Have an Adverse Credit History?
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Direct PLUS Loan by obtaining an endorser who does not have an adverse credit history or documenting to the U.S. Department of Education's satisfaction extenuating circumstances relating to your adverse credit history. If you are a parent borrower, the endorser cannot be the child on whose behalf you are borrowing.
If a parent borrower is unable to secure a PLUS loan, the undergraduate dependent student may be eligible for additional unsubsidized loans to help pay for his or her education. The dependent student should contact the school's financial aid office for more information.
What Additional Steps Must I Take to Receive My Loan?
If you are eligible for a Direct PLUS Loan, you will be required to sign a Master Promissory Note (MPN), agreeing to the terms of the loan. Graduate or professional students will also be required to complete entrance counseling before receiving a PLUS loan. Contact the financial aid office at the school you (or your child, in the case of parent borrowers) are planning to attend for details regarding the process at that school.
How Much Can I Borrow?
The maximum PLUS loan amount you can borrow is the cost of attendance (determined by the school) minus any other financial assistance received.
What is The Current Interest Rate?
The interest rate for Direct PLUS Loans is a fixed rate of 7.9%.
Other Than Interest, is There a Charge For This Loan?
Yes, there is a 4% loan origination fee on all Direct PLUS Loans. The fee will be proportionately deducted from each loan disbursement.
How Will I Receive My Loan?
The school will first apply Direct PLUS Loan funds to the school account to pay for tuition, fees, room and board, and other school charges. If any loan funds remain, your school will give them to you to help pay other education expenses. Get more information about receiving aid.
How Do I Pay Back My Loan?
When you receive your Direct PLUS Loan, you will be contacted by your loan servicer. Your loan servicer will provide regular updates on the status of your Direct PLUS Loan and will provide you with information on how and when to repay your loan.
When Do I Begin Repaying My Loan?
Your Direct PLUS Loan enters repayment once your loan is fully disbursed (paid out).
However, if you are a graduate or professional student, your loan will be placed into deferment while you are enrolled at least half-time and for an additional six months after you cease to be enrolled at least half-time.
If you are a parent borrower, you may contact your loan servicer to request a deferment:
- while you or your child are enrolled at least half-time and for an additional six months after your child ceases to be enrolled at least half-time.
If your loan is deferred, interest will accrue on the loan during the deferment. You may choose to pay the accrued interest or allow the interest to capitalize when the deferment period ends. Your loan servicer will notify you when your first payment is due.
What if I Have Trouble Repaying the Loan?
If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your servicer can help you understand your options for keeping your loan in good standing. For example, you may wish to change your repayment plan or request a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan. Learn more about deferment or forbearance options.
As a Parent Borrower, Can I Transfer My Loan to My Child?
No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent, are responsible for repaying the loan.
Can My Loan Ever Be Canceled or Forgiven?
Yes. Before your loan money is disbursed, you may cancel all or part of your loan by notifying your school. After your loan is disbursed, you may cancel all or part of your loan within certain time frames. Your promissory note and additional information you receive from your school will explain the procedures and time frames for canceling your loan.
You also may qualify for forgiveness of some or all of your loan if you meet certain conditions.