Direct PLUS loan

Direct PLUS loans have a fixed interest rate and are not subsidized, which means that interest accrues while the student is enrolled in school. You will be charged a fee to process a Direct PLUS Loan, called an origination fee. An origination fee is deducted from the loan disbursement before you or the school receives the funds. A credit check is performed on applicants to qualify for a Direct PLUS Loan.

There are two types of Direct PLUS loans: the Grad PLUS loan and the Parent PLUS loan.

Grad PLUS loans allow graduate and professional students to borrow money to pay for their own education. Graduate students can borrow Grad PLUS loans to cover any costs not already covered by other financial aid or grants, up to the full cost of attendance.

To qualify for a Grad PLUS loan you must meet three criteria:

• Be enrolled at least half-time at an eligible school in a graduate or professional program.
• Pass a credit check. If you cannot pass the credit check, you can still be approved for a Grad PLUS loan if you obtain an endorser or are approved by the Department of Education through an explanation of extenuating circumstances related to your adverse credit history.
• Meet the general eligibility requirements for federal student aid. While you do not need to demonstrate financial need to borrow a parent PLUS loan, you must be a citizen or eligible non-citizen and the student must be enrolled in an eligible program at their college.

Parent PLUS loans allow parents of dependent students to borrow money to cover any costs not already covered by the student’s financial aid package, up to the full cost of attendance. The program does not set a cumulative limit to how much parents may borrow. Parent PLUS loans are the financial responsibility of the parents, not the student and cannot be transferred to the student upon the student’s completion of school.

To qualify for a Parent PLUS loan, you must meet three criteria:

• Be the biological or adoptive parent for a student enrolled at least half-time at an eligible school. Grandparents, even if they are the custodial parents responsible for the student, are not eligible to borrow Parent PLUS loans.
• Pass a credit check . If you cannot pass the credit check, you can still be approved for a Parent PLUS loan if you obtain an endorser or are approved by the Department of Education through an explanation of extenuating circumstances related to your adverse credit history.
• Meet the general eligibility requirements for federal student aid. While you do not need to demonstrate financial need to borrow a parent PLUS loan, you must be a citizen or eligible non-citizen and the student must be enrolled in an eligible program at their college.

Parent PLUS loans have no “grace period.” A grace period is a time after the student graduates, leaves school, or drops below half-time school enrollment when you don’t have to make payments. Parents must start repaying PLUS loans as soon as the loan is fully disbursed to the student or the school. However, parents may be able to request to delay making payments while their child is in school or for an additional six months after their child graduates, leaves school, or drops below half-time enrollment by requesting a deferment. Parents should contact their loan servicer for more information about how to delay making payments. Parents are still responsible for the interest that accrues while the payments are postponed.

What Repayment Options Are Available for Parent PLUS Loans?

Borrowers of Parent PLUS loans qualify for three repayment plan options:

• Standard Repayment Plan
• Graduated Repayment Plan
• Extended Repayment Plan

If a borrower consolidates their loan into a Direct Consolidation Loan, they are also qualified for the Income-Contingent Repayment Plan .

Do Parent PLUS Loans Qualify for Public Service Loan Forgiveness?

Yes, Parent PLUS loans can qualify for PSLF. To qualify, you must make 120 on-time payments meeting the following requirements:

• Your employment for each month must be with a qualified employer.
• You must be in an eligible repayment plan. To qualify for PSLF, you must be enrolled in an income-driven repayment plan. For Parent PLUS borrowers, that requires you to consolidate the loan into a Direct Consolidation Loan and enter into the Income-Contingent Repayment Plan

Here is more guidance on IDR for Parent PLUS loans and obtaining PSLF.