Parents of dependent students and students pursuing a graduate or professional degree can borrow from the Direct PLUS Loan program. The terms and conditions applicable to parent Direct PLUS Loans (made to parents of dependent students) also apply to Direct PLUS Loans made to graduate and professional degree students. These terms and conditions include: a requirement that the applicant does not have an adverse credit history; a repayment period that begins on the date of the last disbursement of the loan; and a fixed interest rate of 7.9 percent for Direct PLUS Loans. As with Direct PLUS Loans made to parent borrowers, eligible graduate and professional degree students may borrow under the Direct PLUS program up to their cost of attendance, minus other financial aid received.
Unlike parent Direct PLUS applicants, graduate and professional degree student Direct PLUS applicants must file a FAFSA. In addition, graduate and professional degree students must have their annual loan maximum eligibility under the Direct Loan program determined by the school before they apply for a Direct PLUS Loan.
Direct PLUS Loan:
Although not a requirement if the student will not be receiving any other federal student aid, parents are encouraged to have their dependent children submit a FAFSA so their children can receive the maximum student financial aid they’re eligible for. Graduate and professional degree students applying for a Direct PLUS Loan are required to submit a FAFSA.Direct PLUS applicants must meet the general eligibility requirements for federal student aid. If a parent is borrowing on behalf of a dependent undergraduate student, the student must also meet these general eligibility requirements. For example, Direct PLUS applicant and the student must:
- The school must participate in the Direct Loan Program.
- Complete a Direct PLUS Loan application and Promissory Note, available from US Department of Education's Direct Loan Servicing Center.
- be a United States citizen or Eligible Noncitizen,
- not be in Default on a federal student loan, and
- not owe a refund on a federal education grant.
A Direct PLUS Loan applicant must not have an adverse credit history. (A credit check will be conducted.) A Direct PLUS Loan applicant who has an adverse credit history still may be able to receive a loan by documenting existing extenuating circumstances or by obtaining an endorser who does not have an adverse credit history. An endorser or co-signer is someone who agrees to repay the loan if the borrower fails to do so.
The maximum Direct PLUS Loan amount that a parent or graduate and professional degree student can borrow is the student’s cost of attendance minus any other financial aid the student receives.
The school will first apply the Direct PLUS Loan funds to the student’s school account to pay for tuition, fees, room and board and other school charges.
If any loan funds remain, they will be sent to the parent borrower, unless the parent authorizes the school to hold the funds or release them to the student.
Any remaining loan funds must be used for your education expenses.
Yes. A borrower can cancel a Direct PLUS Loan the same way that a borrower would cancel a Direct Loan.
Yes. There is a fee of up to 4 percent of the loan amount.