Eligibility Requirements for the Federal Direct Parent PLUS Loan

1. The borrower must be the parent or step-parent of a dependent student.
2. The borrower must be in good credit standing.
3. The student must be enrolled at least 1/2 time.
4. The borrower must not be in default on another loan.
5. The borrower and the student must be U.S. citizens or eligible non-citizens.
6. The student must maintain Satisfactory Academic Progress.

What is the Federal Direct Parent PLUS Loan?

Parents of dependent students looking to apply for the Parent Plus Loan for the 2024-25 school year should apply after April 1st, 2024.

The Federal Direct PLUS Loan is a federally insured fixed rate loan for parents who have been approved after a credit check is preformed regardless of income or assets. The interest rates on new loans are fixed for the life of the loan; however, every July 1, each year’s new loans will have different fixed rates based on the current market rates. In addition to interest, the borrower will also pay a loan origination fee of the principal amount of each PLUS Loan.

Parents may borrow up to the cost of education minus any other financial aid the student has already received. PLUS Loans are scheduled to go into repayment 60 days after the loan’s final disbursement, but the parent borrower can contact the loan servicer to request deferment of payments until six months after the student ceases at least half-time enrollment. Interest will accrue during the time the student is in school; however, payments to interest and/or principal can be paid during that time without penalty.

The Federal Direct Parent PLUS loan is legally in the parent’s name and can never be transferred to their student.

To Apply for Direct Parent PLUS Loan

The parent will complete the PLUS Loan application and sign the PLUS Loan Master Promissory Note. These steps are both completed on the Student Aid website. The parent will sign in with their own Federal Student Aid ID (FSA ID) to complete these steps.

• The student must complete the FAFSA application online on the Student Aid Website.
• The parent must complete the Parent PLUS Loan Application, and Master Promissory Note (MPN) online at studentaid.gov. Parents will need their Federal Student Aid ID (FSA ID) to log in.
  • The links to the PLUS Loan Application can be located under the "Loans and Grants" Tab.
  • The links to the Plus Loan Master Promissory Note (MPN) can be located under the "Loans and Grants" Tab.

Federal Direct Parent PLUS Loan Denial

If a parent is denied the loan, they can still receive a Parent PLUS Loan through one of these two options:

1. Obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Parent PLUS Loan if the borrower does not repay it. The endorser cannot be the child on whose behalf the parent is borrowing. The endorser will have to complete an Endorser Addendum using an Endorser Code and their own FSA ID and password.
2. Documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to adverse credit history. There is a non-exhaustive list of examples of extenuating circumstances under the "Documenting Extenuating Circumstances (Appeal)" section of the Federal Student Aid website. This list also provides information on what documents are needed for each example.

If a parent wishes to utilize one of the two options listed above, they must also complete PLUS credit counseling. This counseling can be done on the Student Aid website using the parent’s FSA ID and password.

If a parent does not wish to utilize one of the two options listed above, students may receive an additional Federal Direct Unsubsidized Loan ($4,000 for freshmen and sophomores; $5,000 for juniors and seniors). To obtain this additional funding, the parent must send us an e-mail stating that they wish to accept the credit decision on the Parent PLUS loan application.

If the student does not want the additional amount, the student can contact the MSOE Financial Aid Office via email at finaid@msoe.edu to decline the loan.

Federal Loan Processing Overview

• The U.S. Department of Education will notify MSOE electronically after the borrower has completed the PLUS Loan Application and the MPN.
• The borrower will receive a disclosure statement from the U.S. Department of Education providing specific information about their loan, including loan amount, fees and the expected disbursement dates.
• The loan must be accepted and both the PLUS application and MPN completed to ensure that the loan disbursement will be credited to the student’s bill each term. Federal loans will have an origination fee which will be subtracted from the amount requested so the amount reflected on bill will be less than the requested amount.
• The loan disbursement will be posted to the student account during the second week of each term. Once posted to the student account, students and parents will be notified via MSOE email when the PLUS Loan funds have been disbursed.
• Loan applications cannot be processed after the academic year ends or if the student ceases to be enrolled at least half-time.
• Students may also be required to submit their final high school transcripts to MSOE's admissions office before federal aid can be disbursed to their account.

• The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, the Pell Grant program, and other Department of ED programs. There is a detailed history of federal student loans on this site. MSOE is required to inform student/parent borrowers that the loan will be submitted to NSLDS and will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.

• For a full review of the terms and disclosures regarding Federal Direct PLUS Loans, please read the linked Plain Language Disclosure.