Federal Parent Loan (PLUS)
A Federal Direct Parent Loan (PLUS) is a fixed interest rate installment loan to help parents with good credit, pay for their dependent child's education. A parent may borrow up to the student's costs of education minus any financial aid the student receives during the enrollment period. This loan is in one parent's name and the parent is responsible for repayment on this loan.
Federal Direct Loan Program
Direct Loans are low interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education rather than a bank or other financial institution.
Eligible PLUS Loan Borrower
- 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 an adverse credit history.
- The student and parent must be U.S. citizens or eligible non-citizens, 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.
PLUS Loan Program Changes
March 29, 2015 the following changes will be in affect:
- The duration of a credit check will be changed from 90 days to 180 days. The change to 180 days will also apply to credit checks performed prior to March 29, 2015.
- A new loan counseling requirement for applicants who are determined to have an adverse credit history, but who qualify for a Federal Direct PLUS Loan by documenting extenuating circumstances or obtaining an endorser. The applicant must complete the counseling on the Department's studentaid.gov web site.
Generally, loan money will be disbursed to the student's account in two installments, one at the beginning and one at the midpoint of the dependent student's enrollment period. For parent's of students in the Online and Site program, the PLUS loan will be disbursed before each billing period, depending on a students enrollment.
There is a 4.228% origination fee for loans disbursed on or after October 1, 2020 through September 30, 2021. When calculating your out-of-pocket, add on the fee to what you will need to borrow as that will be deducted from each Federal Direct PLUS loan disbursement.
- First payment of principal and interest on the Federal Direct PLUS loan will be due within 60 days of the final disbursement of the current academic year.
- Interest begins to accumulate when the first disbursement is made.
- The standard repayment plan is 10 years. To inquire about other payment options available, please call your servicer.
- Payments may also be postponed while the student is enrolled (forbearance), up to six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.
- A Federal Direct PLUS Loan made to the parent cannot be transferred to the student. The parent is responsible for repaying the PLUS Loan.
- Contact Direct Loan Servicing Center at 800-848-0979 for any repayment or forbearance questions.
- The interest rate for Federal Direct Parent PLUS Loans disbursed on or after July 1, 2020 through June 30, 2021 will be fixed at 5.30%.
Prior Federal Loans and Financial Aid History
Federal loans will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and schools determined to be authorized users of the NSLDS system.
If you currently have a federal student loan and would like to check the interest rate, servicer information, and other financial aid history, go to the National Student Loan Data System (NSLDS) and use FSA (Federal Student Aid) ID.
How to apply for a Federal Direct Parent Loan (PLUS)
THE 2020-2021 PARENT PLUS APPLICATION WILL NOT BE AVAILABLE UNTIL ON OR AFTER APRIL 1, 2020.
New and Returning Borrowers
In order to obtain a Federal Direct Parent PLUS Loan, the student must first complete the Free Application for Federal Student Aid (FAFSA).
If you have problems with the Federal PLUS Loan application process you can contact Direct Loan Applicant Services at 800.557.7394.
- Go to studentaid.gov and sign in with your FSA ID. IMPORTANT: The borrowing parent must sign-in using their information and FSA ID.
- Click on Request a PLUS Loan.
- Under "Select the loan type" click on Direct PLUS Loan for Parents. Read and complete all sections in each step.
- Review and check consent for credit check and certification of information.
- If the Federal PLUS Loan is credit approved, it will be added to the student's financial aid award once BVU receives the application.
- If the Federal PLUS Loan is credit denied, you may choose to proceed by selecting one of the following credit actions. The PLUS Loan will then be processed based on the chosen credit action.
- Obtain an endorser. An endorser is someone who does not have an adverse credit history and agrees to repay the loan if the borrower becomes delinquent in making payments or defaults on the loan.
- Provide documentation of extenuating circumstances to appeal the credit decision.
- Will not pursue a Federal Direct PLUS Loan. If you choose not to pursue, your student may be eligible to receive additional unsubsidized loan funds. Note - If a parent is denied the Federal Parent PLUS Loan, the dependent student becomes eligible for Federal Direct Additional Unsubsidized Loan of up to $4000 as a freshman/sophomore and up to $5000 as a junior/senior.
- Undecided. Note: BVU cannot process a loan with an undecided credit action. Any applications that BVU receives with an Undecided credit action will not be processed and the submission of a new application will be required.
Once the Federal Parent PLUS Loan application is submitted, an electronic confirmation will be transmitted to BVU's Financial Aid Office. Please be aware that it may take 24 to 48 hours for BVU to receive your submitted application.
A Master Promissory Note (MPN) must be completed for all parents borrowing a Federal Direct Parent PLUS Loan. The Parent PLUS MPN can be completed at studentaid.gov.
The Federal Parent PLUS Loan MPN needs to be completed if the following apply:
- You have never signed a Federal Direct Parent PLUS Loan MPN,
- You signed an MPN more than one year ago but no loan disbursed,
- You signed a MPN more than 10 years ago
- You obtained an endorser due to adverse credit history.
- Parent borrowers must complete and sign a separate MPN for each student for whom they are borrowing.
The FSA ID - a username and password - has replaced the Federal Student Aid PIN and must be used to log in to certain U.S. Department of Education websites. Your FSA ID confirms your identity when you access your financial aid information and electronically sign Federal Student Aid documents. If you do not already have an FSA ID, you can create one when logging in to FAFSA.gov, The National Student Loan Data System, studentaid.gov, and Agreement to Serve (ATS).