Federal Direct PLUS Loans (Parent Loans)

Federal Direct PLUS Loans are low-interest loans for parents to help their children who are dependent students meet college costs.  The lender is the U.S. Department of Education rather than a bank or other financial institution. Direct PLUS Loans are:

  • Simple - You borrow directly from the federal government and have a single contact-the Direct Loan Servicing Center - for everything related to the repayment of your loans, even if you receive Direct PLUS Loans at different schools.
  • Convenient - You'll have online access to your Direct Loan account information 24 hours a day, 7 days a week.
  • Flexible - You can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change

To take out a Direct PLUS Loan, You must be the student's biological or adoptive parent or the student's stepparent, if the biological or adoptive parent has remarried at the time of application. The student must be enrolled at an approved school at least half-time and is making satisfactory academic progress. You should have no adverse credit history. Direct PLUS Loans are not based on parents' income.

You may borrow up to the cost of education minus other financial aid awarded, as determined by the financial aid office. You may also borrow for each of your dependent children. For example, if your school's cost of attendance is $10,000 and you're eligible for $5,000 in other aid, you may borrow up to $5,000 through a Direct PLUS Loan. The cost of education includes tuition and fees, room and board, books and supplies, transportation and miscellaneous expenses.

Once your loan is approved, the funds will be sent to the school electronically. Federal PLUS loans are disbursed in at least two installments. The funds will be applied to the student's school account to pay for educational expenses. You will receive any remaining loan money in a check. This remaining money must be used to pay future tuition and other educational expenses.

As of 7/1/13 Direct PLUS Loans have a fixed rate of 6.41%.

In addition to interest, you pay a loan fee of 4.204% of the principal amount of each Direct PLUS Loan that you borrow. This fee helps reduce the cost of making these low-interest loans. 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.

A PLUS Loan Request Form is required in addition to the FAFSA, and Master Promissory Note, (MPN) for Parent PLUS Loans.