Parents of dependent students may be eligible to obtain a Direct PLUS Loan to help pay their child’s education expenses.
To be eligible for a Direct PLUS Loan for Parents:
- The parent borrower must be the student’s biological or adoptive parent. In some cases, the student’s stepparent may be eligible. Learn more about providing parent information on the Free Application for Federal Student Aid (FAFSA).
- The student must be a dependent student who is enrolled at least half time at an institution that participates in the Direct Loan Program. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional degree student, or a ward of the court. Find out if you are a dependent or independent student.
- The parent borrower must not have an adverse credit history (a credit check will be done). If the parent does not pass the credit check, the parent may still receive a loan if a third party (such as a relative or friend who is able to pass the credit check) endorses the loan. The endorser promises to repay the loan if the parent fails to do so. The parent may also still receive a loan if he or she can demonstrate extenuating circumstances.
- The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the federal student aid programs. Learn more about student aid eligibility.
Direct PLUS Loans for Parents FAQs
How does a parent get a loan?
For a Direct PLUS Loan, the parent must complete a Direct PLUS Loan Application and Master Promissory Note (MPN) online. The MPN is a legal document in which the borrower promises to repay the loan and any accrued interest and fees to the Department of Education. It also explains the terms and conditions of the loan. A credit check is required for this loan, and borrowers will receive written confirmation of the credit check result.
In most cases, once you’ve submitted the MPN and it’s been accepted, you won’t have to fill out a new MPN for future loans you receive to pay for the educational expenses of the same student. Unless your child’s school does not allow more than one loan to be made under the same MPN, you can borrow additional Direct PLUS Loans on a single MPN for up to 10 years. Note this is not the case when an endorser is used.
You’ll receive a disclosure statement that gives you specific information about any loan that the school plans to disburse under your MPN, including the loan amount and loan fees, and the expected loan disbursement dates and amounts.
How much can a parent borrow?
The annual limit on a Direct PLUS Loan is equal to the student’s cost of attendance minus any other financial aid the student receives. For example, if the cost of attendance is $6,000 and the student receives $4,000 in other financial aid, the student’s parent can request up to $2,000. We recommend that students and parents only borrow what is needed to cover tuition, books, and materials.
How does the parent get the loan money?
The Department of Education will send the loan funds to American College of Healthcare Sciences. In most cases, the loan will be disbursed in at least two installments, and no installment will be more than one-half the loan amount. The school will use the loan money first to pay the student’s tuition, fees and other school charges. If any loan funds remain, the parent will receive the amount as a check or other means, unless he or she authorizes the amount to be released to the student or transferred into the student’s account at the school. Any remaining loan funds must be used for the student’s education expenses.
What’s the interest rate?
Learn more about interest rates online here. Interest is charged from the date of the first disbursement until the loan is paid in full.
Prior federal loans and financial aid history – Students and parents may check the interest rate, servicer information, and other financial aid history at the National Student Loan Data System.
Interest rate cap for military members – If a parent qualifies under the Service Members Civil Relief Act, the interest rate on loans obtained before entering military service may be capped at 6 percent during the parent’s military service. Parents must contact their loan servicer to request this benefit. View information about other non-loan military education benefits approved for use at ACHS online here.
In addition, the Department of Education does not charge interest (for a period of no more than 60 months) on Direct Loans first disbursed on or after Oct. 1, 2008, while a borrower is serving on active duty or performing qualifying National Guard duty during a war or other military operation or other emergency, and serving in an area of hostility, qualifying for special pay.
Other than interest, is there a charge to get a Direct PLUS Loan?
The parent will pay an origination fee, deducted proportionately each time a loan disbursement is made. The origination fee is disclosed during the loan process.
When does the parent begin repaying the loan?
The repayment period for a Direct PLUS Loan begins when the loan is fully disbursed, and the first payment is due 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment while the student is enrolled at least half time and for an additional six months after the student ceases to be enrolled at least half time.
How does the parent pay back the loan?
The parent will repay the servicer listed on the disclosure statement provided when he or she received the loan. The loan servicer will provide regular updates on any PLUS Loans the parent receives. The loan servicer also will be listed in the parent’s account at the National Student Loan Data System.
Does the Direct PLUS Loan Program offer repayment plans?
Yes, they offer three repayment plans: standard, extended and graduated. The terms differ between the repayment programs, but generally borrowers will have 10 to 25 years to repay a loan. Learn more about Direct PLUS Loan repayment plans.
What if a parent has trouble repaying the loan?
Under certain circumstances, a borrower can receive a deferment or forbearance to temporarily stop or lower the payments on a loan. Learn more about your options here. ACHS’s Department of Student Financial Services is also available to assist you with budgeting and financial planning resources to ensure you are successful in repaying your student loans. ACHS's Department of Student Financial Services is here to help with training on budgeting and managing financial responsibilities as well as to discuss options if the parent experiences financial challenges.
Can the parent’s Direct PLUS Loan be transferred to the student?
No. A Direct PLUS Loan made to the parent cannot be transferred to the student. The parent is responsible for repaying the Direct PLUS Loan.
Can a Direct PLUS Loan be canceled?
Yes, under certain conditions a parent may be released from all obligations to repay the loan. Learn more about having your student loan discharged.