Parents may apply for a Direct PLUS Loan for any year that their student is enrolled at least half-time as an undergraduate student. Under the Federal Direct Student Loan program, the federal government serves as the lender and, as of July 1, 2015, the interest rate is fixed at 6.84%. Fees of 4.29% are subtracted from each disbursement to cover the loan origination fee.
The Direct PLUS Loan is a credit-based loan which allows parents to borrow up to the cost of attendance, less any other financial aid already awarded. Cost of attendance includes the total cost of tuition, fees, and room and board billed by the university, plus a standard calculation for books, supplies, transportation, and personal expenses.
Students whose parents are borrowing a Direct PLUS Loan must complete the FAFSA before applying for the loan. The FAFSA is available at www.fafsa.gov.
Applications for the Direct PLUS Loan are processed online through the U.S. Department of Education student loan website.
The repayment period for a Direct PLUS Loan begins at the time the loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. Borrowers may request an in-school deferment by calling the Direct Loan Servicing Center at 800.848.0979. Payments under the deferment option are deferred until six months after the student ceases to be enrolled at least half-time, although interest continues to accrue. Some families make interest-only payments while a student is enrolled and delay repayment of the principal until after the student graduates.
The Direct PLUS Loan Program for parents offers three repayment plans - standard, extended, and graduated - that are designed to meet the different needs of individual borrowers. The terms differ between the repayment programs, but generally the standard repayment period on a PLUS Loan is 10 years.
Your Federal Student Aid ID (FSA ID) is used each year to electronically sign your student's FAFSA form online. Because the FSA ID is needed to apply for your Federal Direct PLUS, you cannot proceed without it. If you do not have an FSA ID, you can apply for one at fsaid.ed.gov.