Direct PLUS Loans - Financial Assistance for Returning Traditional Students

Direct PLUS Loans Eligibility

Parents of dependent students may apply for a Direct PLUS loan to help pay their child's education expenses as long as certain eligibility requirements are met.

To be eligible for a Direct PLUS Loan for Parents:

  • The parent borrower must be the student's biological or adoptive parent. In some cases, the student's stepparent may be eligible.
  • The student must be a dependent student who is enrolled at least half-time.
  • The parent borrower must not have adverse credit history (a credit check will be done). If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so.
  • The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for federal student aid programs.  

FAQs

What's the interest rate?
The interest rate is fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.

When does the parent begin repaying the loan?
The repayment period for a Direct PLUS Loan begins when the loan is fully disbursed, and the first payment is due 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment:
• while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and
• for an additional six months after the student ceases to be enrolled at least half-time.

How does the parent pay back the loan?
The parent will repay the servicer listed on the disclosure statement provided when he or she received the loan. The loan servicer will provide regular updates on the status of the PLUS Loan, and any additional PLUS Loans that a parent receives. The loan servicer also will be listed in the parent's account at www.nslds.ed.gov.

Repayment Plans—The Direct PLUS Loan Program for parents offers three repayment plans-standard, extended, and graduated-that are designed to meet the different needs of individual borrowers. The terms differ between the repayment programs, but generally borrowers will have 10 to 25 years to repay a loan.

What if a parent has trouble repaying the loan?
Under certain circumstances, a borrower can receive a deferment or forbearance to temporarily stop or lower the payments on a loan.

Can the parent's PLUS Loan be transferred to the student so that it becomes the student's responsibility to repay?
No. A PLUS Loan made to the parent cannot be transferred to the student. The parent is responsible for repaying the PLUS Loan.

Can a PLUS Loan be cancelled (discharged)?
Yes, under certain conditions. A cancellation (discharge) releases the parent from all obligations to repay the loan.
Under the Loan Forgiveness for Public Service Employees Program, borrowers may have the balance of their loans forgiven if they are employed full-time in a public service job and make 120 payments on their loans during that period.


Direct PLUS Loans