Federal Direct PLUS Loans

Direct PLUS Loans are low-interest loans for parents of dependent students to help pay for the cost of a student's education. Parent refers to the dependent student's natural mother or father, custodial stepparent or adoptive parent. The lender is the U.S. Department of Education, though most of the contact will be with your loan servicer. Students for whom PLUS Loan funds are borrowed must be classified as dependent for financial aid purposes, and the Free Application for Federal Student Aid (FAFSA) must be completed before the loan is certified.

Application

The Direct PLUS Loan Application/Pre-Approval is available online at StudentAid.gov after July 1 each year. For parents who are unable to complete the online application a paper application may be downloaded in the Student Financial Assistance forms library or picked up in Student Financial Assistance.

Direct PLUS Loan Limits

Direct PLUS Loans will be certified by USI for the maximum amount for which the borrower is eligible or the amount requested, whichever is less. It is not recommended that you request the maximum amount. Over-borrowing could result in a large unneeded or unwanted refund. Borrow what you need, but only what you need. It never makes sense to run up more debt than you have to. Annual loan limits are adjusted for enrollment status and unmet financial aid budget costs. Both parents may borrow individually but the total of the two loans may not exceed the annual loan limit.

Enrollment Requirements

Students must be enrolled half-time (six credit hours) to be eligible for Direct PLUS Loans.

Creditworthiness and Endorser Alternative

Credit decisions are valid for 90 days. It is recommended credit checks be conducted no sooner than 90 days prior to the student's first day of enrollment. Credit denied applicants who would like to attempt to resolve the denial of the Direct PLUS Loan can contact DL Applicant Services at 800-557-7394. If you are found to have an adverse credit history, you may still borrow a PLUS Loan if you get an endorser who does not have such a history. An endorser is a cosigner, or someone who agrees to repay the loan if you do not. The endorser may not be the student on whose behalf a parent obtains a PLUS Loan. To endorse a Direct PLUS Loan visit StudentAid.gov.

If a parent is denied, the student may be eligible for additional Direct Unsubsidized Loan funds.

If any parent is credit approved or a creditworthy endorser is obtained, additional Direct Unsubsidized Loan funds cannot be awarded.

Direct PLUS Loan Interest Rates

Note: Under law as of August 2013, the maximum interest rate is 10.5%.    

Repayment

Repayment of Direct PLUS Loans begins within 60 days of the second disbursement. Typically, a loan for the academic year goes into repayment in February (during the student's second semester).

Your monthly payment amount on a Direct PLUS Loan will vary depending on the repayment plan you choose and how much you borrowed. To see sample repayment amounts and terms, visit the Federal Student Aid site.

Deferment

For Direct PLUS Loans that are first disbursed on or after July 1, 2008, parent borrowers have the option of deferring their Direct PLUS Loan. For information regarding eligibility or to request a deferment, parent borrowers should contact their loan servicer.

Processing Fees

The U.S. Department of Education charges a loan fee of 4.228% of the principal amount of each Direct PLUS Loan for loans disbursed on or after 10/1/20 and before 10/1/23. The fee is deducted proportionately from each loan disbursement. The Direct PLUS Loan processing fee is subject to change October 1 each year.