Parent Plus Loan Application: Everything You Need to Know

To apply for a Parent PLUS loan, you'll need to create an FSA ID, which is a unique username and password that serves as your digital signature. This is a one-time process that's required for all federal student aid applications.

The Parent PLUS loan application is available on the Federal Student Aid website, and you can also access it through the FAFSA website. You'll need to log in with your FSA ID to access the application.

To be eligible for a Parent PLUS loan, you must be the biological or adoptive parent of a dependent student enrolled at least half-time in a degree-granting program at an eligible school.

Additional reading: Federal Direct Loan Application

To be eligible for a Parent PLUS loan, you must meet certain requirements. You must be the biological parent, adoptive parent, or stepparent of a dependent undergraduate student.

Your child must be enrolled in an eligible degree or certificate program. This is a requirement to receive the loan.

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You must not have an adverse credit history. This means you can't have been 90 or more days late on any debt or have any Title IV debt within the past five years.

You must be a U.S. citizen or eligible non-citizen. This is a necessary requirement for the loan.

If you're denied a PLUS loan, your dependent student may become eligible for increased unsubsidized Stafford Loan limits. However, this only applies if the college financial aid administrator determines that you're likely to be denied a PLUS loan.

To determine your eligibility, you can check the requirements listed below:

To apply for a Parent PLUS Loan, start by filling out the Free Application for Federal Student Aid (FAFSA). This will determine if you're eligible for the loan. The FAFSA will also help you understand the loan's terms and conditions.

You can usually apply online, and you'll need to download and sign a Master Promissory Note (MPN). The MPN is a legal document that promises to repay the loan, including interest and fees.

To qualify for a Parent PLUS Loan, your student must be enrolled at least half-time and eligible for federal student aid. You and your student must also be US citizens, nationals, or eligible noncitizens.

Here's a step-by-step guide to applying for a Parent PLUS Loan:

1. Fill out the FAFSA

2. Complete the Catholic University "Federal Direct Loan Parent PLUS Application"

3. Sign the Parent PLUS Loan Master Promissory Note (MPN)

4. Ensure your student is enrolled at least half-time and meeting Satisfactory Academic Progress

Note that a credit check is performed to determine your eligibility for the loan. If you have a freeze on your credit file, be sure to lift the freeze before applying.

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To be eligible for a Parent PLUS Loan, you must meet certain requirements. You must be the biological or adoptive parent of a dependent undergraduate student enrolled at least half-time.

You'll also need to be a U.S. citizen or eligible non-citizen, and meet minimal credit standards. The student must also meet general eligibility requirements for financial aid. Grandparents and legal guardians aren't eligible unless they've legally adopted the student.

To qualify for a Parent PLUS Loan, you'll need to have a good credit history. For two years before your credit is pulled, you can't have an "adverse credit history", including debts that are more than 90 days overdue totaling more than $2,085, or a collection or charge off.

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To qualify for the loans, you must meet certain requirements.

You must be the biological or adoptive parent of a dependent undergraduate student enrolled at least half-time.

You'll also need to be a U.S. citizen or eligible non-citizen to qualify.

To meet minimal credit standards, you'll typically need to have a decent credit history.

The student you're applying for must also meet general eligibility requirements for financial aid.

Here are the specific requirements for parents:

Grandparents and legal guardians aren't eligible to take out these loans unless they've legally adopted the student.

To qualify for a Parent PLUS Loan, you'll need to meet some specific credit requirements. You can't have an "adverse credit history" for two years before your credit is pulled, which includes debts that are more than 90 days overdue totaling more than $2,085, or a collection or charge off.

For a longer period of five years, you can't have a loan default, a discharge of debts in bankruptcy, foreclosure, repossession, tax lien, wage garnishment, or a write-off of a federal student aid debt.

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If your credit needs improvement, you may still be able to get a Parent PLUS Loan. You can provide documentation and get approved by adding an endorser or documenting extenuating circumstances.

Here are the two options for getting approved with less-than-perfect credit:

Remember to document any extenuating circumstances and show how the situation has improved. And, if you're approved because of extenuating circumstances or an endorser, you'll need to complete PLUS Loan credit counseling, which usually takes 20 to 30 minutes.

The interest rate for Parent PLUS Loans first disbursed on or after July 1, 2024, and before July 1, 2025, is 9.08%. This rate is fixed for the life of the loan.

Interest rates and origination fees can change on July 1 each year, but once issued, the interest rate is fixed and never changes.

A 4.228% fee applies to loans disbursed on or after October 1, 2020.

Note that private student loans may have a better interest rate than PLUS Loans if parents have excellent credit, so it's worth comparing them.

The interest on the PLUS loan is not subsidized while the student is in school, unlike the subsidized Stafford and Perkins loans.

Here's a summary of the interest rates and fees:

You can choose from several repayment plans for Parent PLUS Loans, including the income-contingent repayment plan, which allows for lower monthly payments based on your income. This plan requires income verification.

If you're looking to keep payments low, you can consider consolidating your loans into a single loan with a 10-year extended repayment plan or a Parent PLUS consolidation loan. Consolidation means combining all your loans into one, which can potentially give you up to 30 years to pay back the loan.

Repayment begins 60 days after the funds are fully disbursed, and the repayment term is up to 10 years. You can also defer repayment while the undergraduate student on whose behalf you borrowed the PLUS loan is in-school and for a six-month grace period after the student graduates or drops below full-time enrollment.

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Here are some repayment options:

Remember, you can always repay student loans early without penalty, so it may help to choose a longer, more affordable repayment option and make extra payments. Ten dollars per month or more added to your monthly payment may reduce months off your total repayment time frame.

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Signing a Master Promissory Note is a crucial step in the Direct PLUS loan process. You'll need to sign this note before receiving your loan funds.

The Master Promissory Note is a legal agreement that outlines the loan's terms, including repayment, interest, and fees. It's essential to understand the terms before signing.

If your school closes before your child can complete their program, you may still be responsible for repaying the loan. This is one of the scenarios where you'll need to review the loan's terms carefully.

You'll also want to review the loan's terms if your loan eligibility was falsely certified by the school your child attended. This can affect your repayment options and responsibilities.

Direct Consolidation Loans on the Income-Contingent Repayment Plan have specific repayment terms. For example, making payments for 25 years is a significant commitment.

You can also qualify for Public Service Loan Forgiveness, which can significantly impact your repayment plan.

You have several repayment plan options for your Parent PLUS Loans. The income-contingent repayment plan can have higher payments than other plans, but it allows you to make lower monthly payments if you qualify.

To qualify for the income-contingent plan, you may want to consider consolidating your Parent PLUS Loans to one federal direct loan after you finish all the borrowing for your student or students.

You can also choose a 10-year extended repayment plan or consolidate your loans into a single loan with a repayment term of up to 30 years. Consolidation means combining all your loans into one loan, which can potentially lower your monthly payments.

However, keep in mind that extending the term of your loan may result in paying more over the life of the loan. If you consolidate your loans, you can choose other plans for repayment, such as an income-driven plan.

Some repayment plans may also offer forgiveness options, like the Public Service Loan Forgiveness (PSLF) program. To get an idea of whether you could qualify, call the number on the PSLF employer certification form.

Here are some repayment plan options to consider:

Repaying your loans early without penalty is always an option. Consider choosing a longer, more affordable repayment option and making extra payments. Just a few extra dollars per month can reduce the balance and interest charged, and may even shave months off your total repayment time frame.

If your Direct Parent PLUS loan is denied, don't worry, there are options available to you. You can call Direct Loans to appeal the decision and discuss the reason for the denial.

You can also add an Endorser, also known as a co-signer, to the loan application to improve your chances of approval. If you're not sure how to do this, call the Office of Student Financial Assistance (OSFA) for help.

If you're a freshman or sophomore, you may be eligible for an additional Unsubsidized Stafford Loan, which can provide up to $4,000 in additional funds. Juniors and seniors may be eligible for up to $5,000 in additional funds.

If you're approved through an appeal decision or by adding an Endorser, you'll be required to complete Credit Counseling at studentaid.gov.

Here are the details on additional Unsubsidized Stafford Loan eligibility:

Keep in mind that if you're approved for a Direct Parent PLUS loan at a later time, the additional Unsubsidized Stafford Loan will be canceled.

Funds are normally payable in two disbursements, one-half of the total loan amount for each semester (Fall/Spring).

The first disbursement will be available no earlier than 10 days before the start of each term, and the second disbursement will follow shortly after.

A financial aid award notice will be available in Cardinal Station indicating the total loan amount of the Direct Parent PLUS loan awarded.

The loan will not appear on the student's bill until all requirements have been met.

If additional financial assistance or other educational resources are received by the student after the Direct Parent PLUS application is certified, one or both of the loan disbursements may be reduced or canceled to prevent over-awards.

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You can enroll in direct deposit for refunds using the "Cardinal Pay" tab in the student portal or by contacting the Enrollment Services office at (202) 319-5300.

If you receive any additional resources, or if your enrollment or academic standing changes at any time during the year, the PLUS loan may be reduced or canceled.

Direct Refunds are a straightforward process. Any excess funds on your student's account will be refunded by paper check or direct deposit, if requested.

You can request direct deposit to receive refunds more quickly. The University Refund Processing Schedule is available from the Office of Enrollment Services - Student Financial Services.

To change repayment plans, simply log in to your account on studentaid.gov at any time.

If you're considering a Parent PLUS loan, it's essential to explore alternative options to find the best fit for your family's financial situation. Direct federal loans, such as Direct Subsidized and Direct Unsubsidized loans, are a great alternative, offering lower interest rates and more favorable repayment plans.

Private student loans can also be a viable option, especially if you don't qualify for a Parent PLUS loan or can get a better interest rate elsewhere. You can either apply for private parent student loans or cosign your child's private loans.

Saving up for your child's education is another great way to reduce the amount you'll need to borrow. Even if you can't pay for the entire cost of their education, saving some money upfront can make a big difference.

Grants and scholarships are the best way to reduce the cost burden of college, and your child should definitely apply for these to help cover their tuition. In fact, the more financial resources you can find, the less your family will have to rely on loans.

If you're rejected for a Parent PLUS loan, your child may be eligible for more federal student loans at a lower interest rate. However, this may not cover the full amount needed, and your child may still need to find other ways to fill the financial aid gaps.

To determine if a Parent PLUS loan is right for you, consider the following reasons: your child needs more money for school than they can receive from federal student loans, you have good credit, you're willing to take on the financial responsibility of a loan, or you can take advantage of some of the same benefits as other federal student loans.

Here are some key takeaways to consider when exploring Parent PLUS loan alternatives: