The Federal Direct PLUS loan is a loan in the parent’s name to assist their undergraduate dependent student when there is a gap between the cost of attendance and the student’s own financial aid.
The biological or adoptive parent of a dependent undergraduate student who meets all the eligibility requirements may apply for a PLUS loan. A step-parent, if still married to the student's biological parent, and whose income is reported on the student’s FAFSA, is also eligible to borrow on behalf of the student. Grandparents, other relatives or legal guardians are not eligible for the Parent PLUS loan
Parent PLUS loans for Summer 2017 are part of the 2016-17 academic year. Parents should select the academic period for 05/2017 to 08/2017 when applying for the loan at www.studentloans.gov. An application for a summer PLUS loan should not be requested until the student has registered for a minimum of six credit hours over the course of the summer (this can be from a combination of different summer modules).
Parents who also intend to file a PLUS loan application for the 2017-18 academic year, will need to file a separate application for this loan period on or after JUNE 1, 2017.
Exception: Under certain extenuating circumstances (which must be documented) a parent may be eligible for an automatic denial of the PLUS loan without completing the online credit check. Please contact our office prior to applying for a PLUS loan if you feel that you have an extenuating circumstance. Several examples are listed below:
The parent is not a U.S. citizen or an eligible non-citizen (must provide proof of citizenship such as passport, visa status, etc)
If the parent is not credit approved for the PLUS loan, an increase in the student’s unsubsidized loan will be offered to them if they are eligible. Based on their remaining eligibility for aid, freshmen and sophomores may typically borrow up to an additional $4,000 in the unsubsidized loan; juniors and seniors may borrow up to an additional $5,000 annually. Students will need to accept, reduce, or decline any additional loan that is offered to them.
Credit approval will be given to anyone who does not have adverse credit; it is not based on low income, the amount of loan requested, the amount of debt a family has, or a parent’s FICO score. Even parents who do not have a credit history may be approved. A parent will generally be approved for a PLUS loan as long as they do not have adverse credit as defined below.
The following criteria will determine when a PLUS Loan is denied due to adverse credit:
A Parent PLUS loan applicant has an adverse credit history if, in addition to other conditions (e.g., bankruptcy, foreclosure, tax lien, or a default determination) the applicant has one or more debts that:
The following options are available for parents whose PLUS application is denied:
Parents who are not initially credit approved for the PLUS loan, but who qualify by documenting extenuating circumstances or obtaining an endorser, must complete a PLUS loan counseling requirement at www.studentloans.gov before the loan can be originated.
Loan amounts can be up to the student’s cost of attendance minus any other aid that the student has received including other loans
An origination fee will be deducted from the loan by the Department of Education prior to the disbursement of the loan (you should allow for this deduction when determining the amount you wish to borrow). The current origination fee is 4.276% on the gross amount of the loan. The fee on a loan of $10,000 would be $427.
A PLUS loan can be requested for the entire academic year and disbursed equally between the fall and spring semesters (preferable), or it can be borrowed for one semester at a time. Credit approvals/denials expire after 180 days.
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