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 once your loan is fully disbursed (paid out); and a fixed interest rate of 7.6%. Students and parents may borrow under the Direct PLUS program up to their cost of attendance, minus other financial aid(s) 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.
What are the Eligibility Requirements for Direct PLUS Loans?
Direct PLUS Loan 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:
- Be a United States citizen or Eligible Noncitizen,
- Not in Default on a federal student loan, and
- Do not owe a refund on a federal education grant.
Additional Requirements to Receive a PLUS loan
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).
In case of documenting extenuating circumstances or obtaining an endorser, a mandatory PLUS Counseling is required for parent and graduate/professional student Direct PLUS Loan applicants. The applicant must complete the counseling on the Department's studentloans.gov
How much can a parent or graduate and professional degree student borrow under the Direct PLUS Loan program?
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.
If a parent obtains a Direct PLUS Loan to help pay for a dependent student’s education, who will receive the loan money, is it the parent or the student?
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.
Can a borrower cancel a Direct PLUS Loan even after signing the Promissory Note and agreeing to the terms of the loan?
Yes, a borrower can cancel a Direct PLUS Loan the same way that a borrower would cancel a Direct Loan.
Other than interest, are there any fees or charges to get a Direct PLUS Loan?
Yes, there is a 4.248% origination fee on all Direct PLUS Loans.