The Federal Direct PLUS Loan is a non-need-based loan for parents of all income levels. Parents without an adverse credit history may borrow up to the total cost of education minus financial aid.
Interest Rate/Loan Fees
Federal PLUS Loans have a fixed interest rate of 7.21%. An origination fee of 4.288% of the loan principal is deducted at the time of loan disbursement.
PLUS Application Process
Parents who wish to borrow through PLUS can request a loan and complete an electronic Master Promissory Note (eMPN) at studentloans.gov. Please note that students are also required to complete the FAFSA (school code 002036.)
Loan proceeds are disbursed in two equal installments, once each semester.
PLUS Loan Repayment
Repayment of PLUS Loans begins 60 days after the funds are fully disbursed. Parents have the option of deferring payments on the PLUS Loan while the undergraduate student on whose behalf the loan was borrowed is enrolled and during the six-month grace period after the student graduates or ceases to be a student. Interest continues to accrue during this deferment period, however. Alternate repayment terms such as extended repayment, graduated repayment and income-contingent repayment are also available. Extending repayment can make monthly payments more manageable, but may result in more interest paid over time. Comprehensive information regarding loan repayment, including repayment calculators to help you estimate monthly payments is available through at studentaid.ed.gov.