How to Apply for Federal PLUS Loans

To be eligible to borrow through the Federal Parent PLUS Loan program, a parent must be a biological or adoptive parent of the undergraduate student or married to the student’s parents. Thus, stepparents are eligible to borrow Federal Parent PLUS loans only while they are married to the student’s biological or adoptive parent. If the stepparent’s spouse dies, or the stepparent gets divorced, the stepparent is no longer eligible for the Federal Parent PLUS loan .

The student and parent must also satisfy other general eligibility requirements for federal student aid , including citizenship status, student enrollment in an eligible degree or certificate program, and neither student nor parent in default on a federal student loan or grant overpayment.

To obtain a Federal PLUS Loan , talk to the college’s financial aid office . The Federal PLUS Loan is disbursed through the college financial aid office , so they administer the application process and determine the maximum amount you can borrow. They will ask you to complete a PLUS loan application at the web site. You may be required to complete entrance counseling .

PLUS Loan borrowers will also have to sign a Master Promissory Note (MPN) at to obtain a Federal PLUS Loan . The Master Promissory Note is good for a continuous period of enrollment at a specific college for a period of up to 10 years.

Loan Disbursement

The federal government sends the funds from a Federal PLUS Loan directly to the college. The college financial aid office then applies the loan funds to tuition and fees (plus room and board if the student is living in college housing).

Any remaining credit balance is normally “refunded” to the student or parent within 14 days. (Parents can authorize the college to refund any leftover Federal Parent PLUS loan proceeds to the student.) The 30-day title loans Tennessee delay for first-time, first-year borrowers does not apply to Federal Parent PLUS Loans. Federal PLUS loans will generally be disbursed in two installments.

Loan Repayment

Repayment of Federal PLUS Loans begins within 60 days of full disbursement . However, parents may request a deferment from their loan servicer to delay the start of repayment until the end of the six-month grace period after the student graduates or drops below half-time enrollment. Repayment can also be deferred while the parent borrower of a Federal Parent PLUS Loan is enrolled at least half-time in college. Interest will accrue and will be added to the loan balance if it isn’t paid as it accrues.

A parent loan is not directly eligible for an income-driven repayment plan . However, if the loan entered repayment on or after and is included in a Federal Direct Consolidation Loan , the consolidation loan is eligible for income-contingent repayment (ICR). This may also make the Federal PLUS loan eligible for public service loan forgiveness . Otherwise, Federal Parent PLUS loans are eligible for standard 10-year repayment , extended repayment and graduated repayment .

Parents cannot transfer a Federal Parent PLUS loan to the student, unless they refinance with a private lender, giving up federal loan protections. However, nothing stops a parent and student from having a side agreement in which the student agrees to make the payments on the Federal Parent PLUS Loan . But, students need to be careful to avoid borrowing too much.

Borrowers who sign up for auto-debit, where the monthly loan payments are automatically transferred from the borrower ‘s bank account to the lender, may receive a 0.25% interest rate reduction as an incentive.

Loan Cancellation

Federal Direct PLUS loans are eligible for discharge upon the death or total and permanent disability of the borrower . In addition, Federal Parent PLUS loans may be discharged upon the death (but not disability) of the student on whose behalf the loan was borrowed.


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