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Undergraduate Types of Aid

Federal Direct Parent PLUS Loan

A student studies outside Echlin Center where undergraduate admissions is housed

Undergraduate Types of Aid

Federal Direct Parent PLUS Loan

Loan | Various Amounts | U.S. Department of Education

Federal Direct Parent PLUS Loans are available to creditworthy parents of dependent, undergraduate students and can be processed for up to the cost of attendance minus any financial aid the student is receiving.

Overview of the Parent PLUS Loan

  • Application: Parents choosing to borrow through the government’s Federal Direct PLUS loan program can apply on the studentaid.gov website. More details about how to apply are available below.

  • Repayment: Repayment begins 60 days after the loan is fully disbursed, unless the borrower chooses the deferment option on the PLUS loan application. 

  • Interest Rate: The Parent PLUS loan has a fixed interest rate determined each academic year by the federal government and published on the studentaid.gov website.

    • The current loan interest rate for the 2024-2025 is 9.08%.

  • Origination Fee: The Parent PLUS loan has a 4.228% origination fee; borrowers should be sure to include that cost in the amount they are borrowing. More details about the origination fee are available below.

Learn more about the Parent PLUS loan on studentaid.gov

How to Calculate Your Loan Application Amount

When applying for the amount needed, borrowers should take into account the origination fee when calculating the gross amount of the loan proceeds.

The formula to calculate the amount needed to borrow prior to the deduction of the origination fee is as follows:

[Amount needed] ÷ (divided by) [0.95772] = Gross loan amount to be borrowed/applied for

For example, if a parent needed to borrow a PLUS loan to cover $10,000 in annual expenses, he/she would need to apply for $10,441 to allow for the deduction of the origination fee. The formula would be:

$10,000 ÷ 0.95772 = $10,441 (gross amount to be borrowed)

The lender would then deduct the 4.228% origination fee ($441) on the $10,441 borrowed, which would yield a $10,000 net loan disbursement equal to the loan amount needed.

Application Process

To apply for a Federal Direct Parent PLUS loan:

  1. Ensure the student completes a current FAFSA.

  2. The parent must log into studentaid.gov. Once logged in, select the Loans and Grants tab, and complete the Parent PLUS Loan application.

  3. New borrowers have an additional step of completing a master promissory note, which will be valid for up to 10 years.

Once completed, our office will be notified of the results and your loan will be scheduled for school certification.

Learn more about PLUS loans

Considering Your Loan Options

Students are strongly encouraged to exhaust all of their grant, scholarship and federal loan options before considering private loans due to the favorable terms and conditions offered through the federal programs. Traditionally, private loans require the student to obtain a credit-worthy cosigner in order to secure the loan. A credit score is used as a tool to determine eligibility, interest rate offerings, and terms of repayment for private loans.

The Office of Financial Aid does not recommend lender lists for students or parents inquiring about private educational loans, however, we do guide families toward an educational lending website provided by ELMSelect, a non-profit organization that provides a free, unbiased comparison tool for private educational loans. We also suggest that you pay attention to your home state’s loan programs, which can often provide favorable terms, conditions, fees and interest rates on student and parent loans. Visit ELMSelect

Learn more about loan options

Federal Loan Consolidation

Consolidating student or parent loans is similar to refinancing, which allows the borrower to combine his or her federal loans (not private loans) into one consolidated loan, usually extending the repayment period beyond the 10-year maximum. Depending on the loan amount, the new loan terms can go from 12–30 years. Although a borrower's minimum monthly payment can be significantly reduced, it is important to note that in most cases, this will result in additional interest being paid over the life of the loan.

Learn More About Consolidating Loans

 

Learn More About Financial Aid