Federal Parent Loans for Undergraduate Students (PLUS)
A Federal Direct Parent Loan for Undergraduate Students (PLUS) is an unsubsidized federal loan for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance, minus all other financial assistance. The application process includes a credit approval requirement and interest is charged during all periods, including eligible periods of deferment.
The Department of Education developed a process that all Federal Direct Loan borrowers (subsidized, unsubsidized, graduate PLUS, and parent PLUS loans) are encouraged to complete each year called the Annual Student Loan Acknowledgement (ASLA). The ASLA (formerly known as the Informed Borrowing Confirmation process) is intended to better assist borrowers in understanding the financial responsibility of funding their education and provide current information on a borrower's cumulative loan balance. As part of the Master Promissory Note (MPN) confirmation process, the ASLA allows student and parent borrowers to view how much they currently owe in federal student loans, and to acknowledge that they have seen these amounts before borrowing new loans each award year. The ASLA can be completed online at studentaid.gov/asla and becomes available in April each year.
Creditworthy borrowers (the parents of dependent undergraduate students) may borrow up to the full cost of attendance, minus any other aid received by the student. Repayment begins 60 days after the last disbursement is made and can be deferred during the application process or by contacting your loan servicer to request a deferment. Direct PLUS Loans can be deferred while the parent-borrower or dependent student is enrolled at least half-time and for an additional six months after the child or graduate student ceases to be enrolled at least half-time. If the Direct PLUS Loan is deferred, interest will accrue on the loan during the deferment. You may choose to pay the accrued interest or allow the interest to capitalize when the deferment period ends. Your loan servicer will notify you when your first payment is due. Information about the William D. Ford Federal Direct Loan Program can be found at studentaid.gov.
Previous PLUS loan borrowing will be governed by rate rules in effect at the time of borrowing. There is an origination fee that will be deducted from the principal amount borrowed. If denied, applicants may appeal the credit decision through the Department of Education or reapply with a creditworthy endorser. Applicants who appeal the denied credit decision or apply with an endorser are required to complete PLUS Credit Counseling. Alternatively, students whose parents have been denied the Direct PLUS loan (based on credit), may apply for an additional Direct Unsubsidized loan of $4,000 for first- and second-year undergraduate students, or $5,000 for third-year undergraduate students and beyond (described under Federal Direct Loans). The benefit of additional unsubsidized loan eligibility does not apply to graduate students whose Direct Graduate PLUS application has been denied due to credit.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) became law and provided emergency COVID-19 relief measures on federal student loans owned by the Department of Education. The relief measures, which began on March 20, 2020, include suspension of loan payments, stopped collections on defaulted loans, and a 0 percent interest rate. On November 22, 2022, the student loan payment pause and 0 percent interest rate were extended until 60 days after the federal debt relief program is implemented or litigation is resolved. Payments will resume 60 days after June 30, 2023 if the debt relief program is not implemented and the litigation has not been resolved. The Department of Education will notify borrowers before repayments restart. More information is available at studentaid.gov.