If you’re a parent of a dependent undergraduate student or if you’re someone planning to attend graduate school, you’ve probably heard of the PLUS loan. The Direct PLUS Loan is a federal loan program that’s available specifically for these two groups of people to help cover the remaining cost of attending school after all other financial aid has been applied. Below we’ll explain the requirements, application process, and some tips if you’re considering getting a PLUS loan.
Requirements to Receive a PLUS Loan
No Adverse Credit History
A credit history is a summary of your financial strength, including your history of paying bills and your ability to repay future loans. To qualify for a PLUS loan, you cannot have an adverse credit history.
FAFSA Completion and PLUS loan Application
The student going to college (the child of the parent requesting the loan or the graduate/professional student) has to submit a FAFSA before beginning the PLUS loan application process.
Requirements for Parents:
You must be the biological, adoptive, or in some cases, stepparent of the dependent undergraduate student going to college. Your child must also be enrolled at least half-time at a school that participates in the Direct Loan Program. Unlike Direct Subsidized and Unsubsidized Loans; you, the parent, are responsible for repaying the PLUS loan.
Requirements for Graduate or Professional Students:
You must be enrolled at least half-time at a school that participates in the Direct Loan Program.
TIP for graduate and professional students:
If you’re eligible for Direct Unsubsidized Loans, you should borrow those loans before applying for PLUS. The interest rate is lower for Direct Loans.
How Much Money Can I Borrow?
The maximum PLUS loan amount is the cost of attendance (determined by the school) minus any other financial aid received. If you aren’t sure what your school’s cost of attendance is, contact your school’s financial aid office. If you want to see the average annual cost of a school, look it up on our College Scorecard.
How to Apply for a PLUS Loan
In most cases, you’ll apply for a PLUS loan on StudentLoans.gov.
Some schools have a different application process, so check with your financial aid office to make sure you’re going to the right place.
1. Go to StudentLoans.gov
2. Log in using your FSA ID.
3. Select the type of PLUS loan you’re requesting, graduate student or parent.
Before making your selection, you should know the following:
- The award year the PLUS loan is for.
- Parents should have the student’s information, including their date of birth and Social Security number.
4. Fill out the “School & Loan Info” fields.
5. In the section that reads “Loan Amount Requested” you will have a few options.
- Selecting “I want to borrow the maximum amount for which I am eligible” will require you to select the loan period to which you’d like to apply the PLUS loan. This field may be different for each school.
- Selecting “I would like to specify a loan amount” will require you to type in the amount and the loan period start/end dates. If your request exceeds the amount you’re eligible for, the school will contact you.
- If you select “I do not know the amount I want to borrow. I will contact the school” then you should contact the school after your application has been approved, or the school may contact you.
6. Information about the PLUS loan borrower (the borrower is the parent of the undergraduate dependent student or the graduate/professional student):
- Permanent address.
- Mailing address.
- Employer information if the borrower is employed.
7. Credit Check and Adverse Credit History
PLUS loans are the only type of federal student loan that require a credit check. If you are found to have adverse credit history during the application process, you still have options.
Note: If you’re a parent applicant with adverse credit history and you’re unable to get a PLUS loan, your child may be eligible for additional unsubsidized student loans. Check with the financial aid office at your child’s school for details.
Even with adverse credit history, there are two ways you may still be able to quality for a PLUS loan:
- Obtain an eligible endorser and complete PLUS credit counseling.
- Document extenuating circumstances relating to your credit history and complete PLUS credit counseling.
8. Sign a Master Promissory Note (MPN)
After finding out that you’re eligible for the PLUS loan, you’ll be required to sign an MPN and agree to the terms of the loan. Make sure you read your MPN carefully because it’s a binding legal document that lists all the conditions of your loan.
Graduate students: If it’s your first time receiving a PLUS loan, you’ll be required to complete entrance counseling. Confirm with your school to make sure.
Note: If you have previously received a PLUS loan you may not have to complete another MPN. Check with your school to confirm.
How do I find out how much I can borrow?
After your PLUS loan request is complete, the school will inform you of how much you’re eligible to receive.
How and when will I get my loan?
The school will apply funds to the student’s school account to cover tuition, fees, room and board, and other school charges. If there is a remaining balance, the school will give it to the student to help pay for other education expenses. Parents who have been approved for a PLUS loan have the option of asking the school to pay the remaining funds directly to the student.
Each school has a different schedule for disbursing PLUS loans, so check with the school to find out when you should expect the funds.
Photo by Getty Images
Sandra Vuong is a Digital Engagement Strategist at Federal Student Aid.