Parents of dependent students can borrow the total annual cost of attendance (minus other financial aid) through the Federal Direct Parent PLUS Loan.
Direct Parent PLUS Loan Features
- A minimal credit check is required.
- The interest rate is variable-fixed (adjusted each year for new loans, but remains fixed for the life of that particular loan).
- The repayment period is ten years.
- The parent borrower can request to defer a PLUS loan for up to four years while their student is enrolled as an undergraduate (all requests are accepted). To request a deferment, call Direct Loan Servicing at 1-800-848-0979. Be sure to find out who your loan servicer is so you can request the deferment from them.
Apply for a Federal Direct PLUS Loan
The PLUS loan only covers charges during the current academic year, and cannot be used for prior academic years.
Credit Approval Process
While the credit approval process is more lenient than private, alternative loans—in that there is no debt-to-income ratio calculation—if you have one of the following items on your credit report, you will likely be declined:
- 90 or more days delinquent on any debt;
- Declared bankruptcy chapter 7, 11, or 12;
- Account in foreclosure;
- Account in repossession;
- Tax lien (county, state, or federal);
- Lease or contract terminated by default;
- Wage garnishment;
- Default on a student loan;
- Charged off account with an account balance greater than zero dollars;
- Collection account with an account balance greater than zero dollars.
Due to changes in the Federal PLUS Loan credit criteria, individuals previously approved for a PLUS Loan may now encounter a denial if they have 9 or 10 (as noted above) on their credit report. To appeal the credit denial, contact Direct Loan Applicant Services at 1-800-557-7394.
You may also choose to use an endorser (co-signer) on the PLUS Loan. To do so, contact your student’s financial aid counselor.
Your endorser will need to obtain a FSA ID and complete the Endorser Addendum (using their own SSNO and FSA ID). They will need a Loan ID, which the Financial Aid Office will provide. If the endorser is approved, you (the parent borrower) must complete a new PLUS MPN, even if you previously completed one in a prior year. Every endorsed loan requires a new PLUS MPN.