Federal PLUS Loans (For Parents and Graduate or Professional Students)

Parents who wish to take advantage of this program do not need to demonstrate financial need. Repayment of principal and interest begins within 60 days after the funds are disbursed. Under this program, borrowers may defer the payment of principal under certain circumstances. For instance, a parent may be eligible for an in-school deferment based on the enrollment status of the student for whom the loan was borrowed. An additional six month deferment may also be available after the student graduates, withdraws or drops below half-time enrollment. Borrowers should contact their loan holder (Direct Loan Servicing Center for Federal Direct Loans, or the lender for loans made through the Federal Family Education Loan Program) for more information on this and other available deferments.

Note: Graduate and professional students may also borrow through the Federal PLUS Loan Program. For more information, refer to the Federal PLUS Loan Program page within the Student Zone's Advanced Degree section.

* Before July 1, 2010, Stafford, PLUS, and Consolidation Loans were also made by private lenders under the Federal Family Education Loan Program.  

Eligibility

To be eligible, you must:

• Be a U.S. citizen or eligible non-citizen
• Be borrowing for a dependent student who meets the eligibility criteria for the Federal Stafford Loan
• Undergo a credit check (loans will be denied to parents with adverse credit, as defined by federal regulations)
• Not be in default on an educational loan or owe repayment on a federal or state grant

How to Apply

The financial aid administrator at the college your student attends determines your eligibility for the loan and can provide the proper application documents.

A chart, which conveniently outlines loan limits, interest rates and applicable fees in one document (for loans first disbursed on or after July 1, 2010 through June 30, 2011), is available here at College Zone. Specific details regarding each of these topics are provided in the following sections.

Current Interest Rate for Federal PLUS Loans

The current Direct PLUS loan interest rate is fixed at 7.9%.

Federal PLUS Loans disbursed through the Federal Family Education Loan Program on or after July 1, 2006 and prior to July 1, 2010 have a fixed interest rate of 8.5%.

Loans disbursed prior to July 1, 2006 (including loans made through private lenders via the Federal Family Education Loan Program) have a variable interest rate, adjusted annually on July 1, with a maximum of 9%. The Federal PLUS loan variable interest rate for July 1, 2010 -
June 30, 2011 is 3.27%.

The annual maximum amount that can be borrowed under the Federal PLUS Loan Program is equal to the Cost of Attendance minus (-) financial aid received. There is no aggregate maximum.

Fees

A federally mandated loan fee of four percent is charged on loan proceeds prior to disbursement.

Disbursements

Loans are generally disbursed in at least two installments. Check with the financial aid office at your student's college to learn how the loan(s) will be disbursed.

Proceeds will be electronically transmitted directly to the institution. The college must use the loan money first to pay the student's tuition, fees, room and board, and other charges. If any loan funds remain after all college charges have been paid, then the parent will receive the balance (unless he or she authorizes the amount to be released to the student, or transferred into the student's account at the college). Any remaining loan funds must be used for the student's education expenses.

Rights and Responsibilities, Repayment, Deferments

When you borrow a Federal PLUS Loan, you should be aware of the borrowing basics.