Parent Plus Loans
Information on Federal Direct Parent PLUS Loans
Your guide to navigating Parent PLUS
A Parent Loan for Undergraduate Students (PLUS) is a low-interest loan to help you, as the parent borrower, pay for your child's education beyond high school.
- Available without regard to financial need. However, satisfactory academic progress as well as an adequate enrollment level is required.
- The lender (Federal Treasury) is required to determine whether you have an adverse credit history.
- Parent borrower must be the natural or adoptive parent (or in some cases a stepparent) of a dependent student.
- You may borrow up to the full cost of attendance, minus all other aid awarded.
- The parent borrower, you will be responsible for repaying the loan. Loan repayment begins on the date the loan has been fully disbursed.
Step by step process
The FIRST step in the electronic PLUS application process is the completion of the Free Application for Federal Student Aid (FAFSA) by you and your student. You may complete the FAFSA at https://fafsa.ed.gov/. This will determine eligibility for any of the federal aid programs available. You are advised to wait until the student receives a financial aid award offer from ESU before continuing with the PLUS application.
The SECOND step in the PLUS process requires the completion of the Federal Direct Parent PLUS Loan Application where you will confirm several items including:
- the loan period for which the funds are requested
- the amount requested
- the disposition of excess funds
When completing this application, a credit check will be performed to determine the parent's eligibility for the loan. The application can be found online at https://studentaid.gov/.
The THIRD step is for a parent borrower to complete the Direct Loan Master Promissory Note (DLMPN) for Parent PLUS Loans on behalf of the student. If you already have a valid DLMPN on file with Direct Lending, you can skip this step. Each DLMPN is valid for 10 years as long as a disbursement took place. An exception to this is if the Parent PLUS loan was endorsed the MPN is valid only for one year. This can be done by going to https://studentaid.gov/.
The FOURTH step in the PLUS process occurs when the funds are disbursed. After direct institutional costs (tuition/fees and campus room/board) have been paid, any excess funds will go either directly to your dependent student (by the method determined by the student for their other federal financial) or to you, the parent borrower, via check.
- PLUS loans are subject to a 4.228% origination fee if first disbursed after October 1, 2020.
- You have the right to cancel all or a portion of the PLUS loan proceeds by contacting the Office of Financial Aid, Scholarships, & Veterans Services prior to disbursement.
The FIFTH step in the PLUS process is the repayment of the Federal Direct PLUS loan.
- The repayment period for all PLUS loans begins on the date the loan is fully disbursed. For PLUS loans that disburse on or after July 1, 2021, the interest rate will be 6.28%. Please note that the interest rates are variable-fixed, meaning that the interest rate can change every July 1, but any loan taken under that rate will remain fixed for the life of the loan.
- Parent PLUS loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower.
- During the deferment period, interest will continue to accrue. The parent borrower will be sent quarterly interest statements and will have the option of paying the interest as it accrues during the deferment period.
- The Federal Direct PLUS Loan does not have to be fully disbursed in order for a parent borrower to request a deferment based on the dependent student's enrollment status.
- Federal Direct Parent borrowers must must contact their loan servicer to request a deferment.
- PLUS loans disbursed on or after July 1, 2021 will have an interest rate of 6.28%.
- Please note that the interest rates are variable-fixed, meaning that the interest rate can change every July 1, but any loan taken under that rate will remain fixed for the life of the loan.
- Loan repayment begins once the loan has been fully disbursed. An optional deferment of repayment can be requested on the application or by contacting your loan servicer.
- PLUS loans first disbursed on or after October 1, 2020 will have an origination fee of 4.228%
If a student is eligible for the PLUS loan, the amount is calculated by taking the student's cost of attendance minus any other estimated financial assistance. Once a loan has been accepted, the Office of Student Financial Aid and Scholarships will create a loan application with the Department of Education provided that the parent has completed a Master Promissory Note (MPN) and loan application. These can be completed by going to https://studentaid.gov/. When completing the PLUS application and PLUS loan master promissory note, the parent borrower should log in to the website using their FSA ID. If the parent applies for the loan and is denied, the student can be awarded additional unsubsidized Direct Stafford loans at the independent annual limits for their grade level.
You have the right to cancel all or a portion of the PLUS loan proceeds by contacting the Office of Financial Aid, Scholarships, & Veterans Services prior to disbursement or 14 days after disbursement.