Federal Direct PLUS Loans for Parents
Federal Direct PLUS Loans are available to parents who want to borrow funds on behalf of their dependent child to pay education expenses for an undergraduate who is enrolled at least half-time basis (six or more credits each semester).
This loan cannot be used to pay past-due balances from a prior term and must be processed during a term the student is currently enrolled on a half-time basis.
Borrowing is limited to the cost of attendance (as determined by St. Thomas) minus any other other financial aid the student is receiving, such as scholarships, grants and work-study funds.
Federal PLUS Loans for Parents vs. Private Loans
The decision of whether or not to borrow additional loans and which program to use is a difficult one for some families. Before making the decision, the Financial Aid Office encourages families to consider the differences between Federal PLUS and private loans.
How to Apply
Before applying for a Federal Direct PLUS Loan for Parents, you must be prepared to enter a loan amount on the application.
Direct PLUS Loan Details
Eligibility
Generally, parents are eligible if:
- Their student has filed a Free Application for Federal Student Aid (FAFSA) for the academic year.
- Their student is enrolled at least half-time (six or more credits each semester) in a degree program.
- They are a natural parent, adoptive parent, or stepparent (if stepparent’s income and assets are considered on the FAFSA) of a dependent student.
- They are a U.S. citizen or eligible noncitizen.
- They have a valid Social Security number.
- They are not in default on a federal student loan or owe money on a federal student grant.
Interest Rates and Fees
The interest rate on the Federal Direct PLUS loan is 8.05%. This is a fixed interest rate for loans disbursed on or after July 1, 2023 through June 30, 2024 and is effective for the life of the loan. Students are required to have a current Free Application for Federal Student Aid (FAFSA) on file before their parent may apply for a Federal Direct PLUS Loan.
There is a federal loan origination fee of 4.228%. This fee is deducted from each disbursement.
Credit Requirements
A credit check is required and performed by the U.S. Department of Education.
If you have recently frozen your credit report at Equifax, Transunion or Experian you may need to unfreeze your information before applying for a Direct PLUS Loan for Parents. A credit check is a required part of the Direct PLUS Loan Request or the Endorser Addendum process. As such, a borrower or endorser must remove any active credit freeze before starting the PLUS application or Endorser Addendum. Unfortunately, Federal Student Aid and the University of St. Thomas cannot unfreeze a credit report for the applicant.
Please note that Federal Student Aid uses credit reports from two of the three main credit bureaus (currently Equifax and TransUnion). If your credit report is frozen at only one credit bureau, it is possible a credit determination could be made using the secondary credit bureau.
Repayment Terms
Repayment will begin within 60 days after disbursement of the full amount borrowed for an academic year. Interest accrues as soon as the first disbursement is made. There is no grace period for this loan; the parent borrower repays both principal and interest while their student is in school.
The repayment term will be 10 to 30 years depending upon the repayment plan selected. Parents have the option to defer payments for PLUS loans originated after July 1, 2008 provided the designated student is enrolled at least half-time each semester (six or more credits), plus a six-month post-deferment period.
Parents may request a deferment during the application process or contact the federal loan servicer of their PLUS loan.
Eligibility
Eligibility
Generally, parents are eligible if:
- Their student has filed a Free Application for Federal Student Aid (FAFSA) for the academic year.
- Their student is enrolled at least half-time (six or more credits each semester) in a degree program.
- They are a natural parent, adoptive parent, or stepparent (if stepparent’s income and assets are considered on the FAFSA) of a dependent student.
- They are a U.S. citizen or eligible noncitizen.
- They have a valid Social Security number.
- They are not in default on a federal student loan or owe money on a federal student grant.
Interest Rates and Fees
Interest Rates and Fees
The interest rate on the Federal Direct PLUS loan is 8.05%. This is a fixed interest rate for loans disbursed on or after July 1, 2023 through June 30, 2024 and is effective for the life of the loan. Students are required to have a current Free Application for Federal Student Aid (FAFSA) on file before their parent may apply for a Federal Direct PLUS Loan.
There is a federal loan origination fee of 4.228%. This fee is deducted from each disbursement.
Credit Requirements
Credit Requirements
A credit check is required and performed by the U.S. Department of Education.
If you have recently frozen your credit report at Equifax, Transunion or Experian you may need to unfreeze your information before applying for a Direct PLUS Loan for Parents. A credit check is a required part of the Direct PLUS Loan Request or the Endorser Addendum process. As such, a borrower or endorser must remove any active credit freeze before starting the PLUS application or Endorser Addendum. Unfortunately, Federal Student Aid and the University of St. Thomas cannot unfreeze a credit report for the applicant.
Please note that Federal Student Aid uses credit reports from two of the three main credit bureaus (currently Equifax and TransUnion). If your credit report is frozen at only one credit bureau, it is possible a credit determination could be made using the secondary credit bureau.
Repayment Terms
Repayment Terms
Repayment will begin within 60 days after disbursement of the full amount borrowed for an academic year. Interest accrues as soon as the first disbursement is made. There is no grace period for this loan; the parent borrower repays both principal and interest while their student is in school.
The repayment term will be 10 to 30 years depending upon the repayment plan selected. Parents have the option to defer payments for PLUS loans originated after July 1, 2008 provided the designated student is enrolled at least half-time each semester (six or more credits), plus a six-month post-deferment period.
Parents may request a deferment during the application process or contact the federal loan servicer of their PLUS loan.
Frequently Asked Questions
In accordance with federal loan regulations and the St. Thomas disbursement schedule, the loan will be applied to your student's account once all requirements are met.
If enrolled in both fall and spring semesters, one-half of the loan will be disbursed at the beginning of the fall semester and the remaining half will be disbursed at the beginning of spring semester. If enrolled in one semester only, the total amount of your loan will disburse at the beginning of the semester.
Information about the federal loan servicer is sent to the borrower after the first disbursement of the loan or can be found using the National Student Loan Data System (NSLDS). The borrower's FSA ID is required to log in to this database and view the Aid Summary. A student's federal loan servicer is listed in the right margin. Contact information for all federal loan servicers can be found in the federal loan servicer directory.
A promissory note is a binding legal document that lists the conditions of your loan and the terms of repayment.
Instead of completing a promissory note every year, a Master Promissory Note (MPN) is a multi-year promissory note that only has to be completed once while the student is attending St. Thomas. The MPN will simplify the processing of your loan(s).
The parent borrower must complete the MPN for a Federal Direct PLUS Loan for Parents online at Federal Student Aid. Log in using your FSA ID username and password. Open the “Loans and Grants” drop-down menu in the toolbar and select “Master Promissory Note (MPN)”. Scroll down to the “I’m a Parent of an Undergraduate Student” section and click the “Start” button to begin.
How Do I Know If I Have a Valid PLUS Loan MPN On File?
You have met the requirements for an MPN if you had an approved PLUS loan and signed an MPN for a previous academic year and all of the following are true:
- The MPN is designated for the same student*
- The MPN is signed by the same parent*
- The MPN does not have an endorser*
*If one of the above statements is not true, you will be required to complete a new promissory note.
If I Already Have A PLUS MPN On File, What Else is Required?
A signed and completed Federal Direct PLUS Loan Application must be submitted as confirmation that you wish to borrow a loan for this academic year. Find the "Apply for a Parent PLUS Loan" link under the "Apply for Aid" drop-down menu in the toolbar.
A Free Application for Federal Student Aid (FAFSA) must be submitted each academic year before a PLUS loan application can be processed. To begin the FAFSA, open the "Apply for Aid" drop-down menu in the toolbar and select "Complete the FAFSA Form."
The FSA ID consists of a username (or verified email address) and password that gives you access to Federal Student Aid’s online systems and serves as your legal signature when completing electronic documents.
Visit Federal Student Aid and click "Create an Account" to learn what your FSA ID can be used for and how to apply.
You may apply for additional PLUS loan funds by completing another PLUS loan application online at Federal Student Aid. Open the “Loans and Grants” drop-down menu in the toolbar and select “PLUS Loans: Grad PLUS and Parent PLUS”. Click the “Learn More” button in the “I am a Parent of a Student” section. Review the instructions and click the “Start” button to begin the application.
The total amount of a PLUS loan may not exceed the cost of attendance minus all other financial aid. You must list the additional amount you wish to borrow on the new application. Please note that your credit history may be reviewed again to determine your eligibility.
If your student receives additional financial aid and you wish to reduce or cancel your Federal Direct PLUS loan, it is important that you notify the Financial Aid Office in writing as soon as possible. You may cancel all or a portion of your loan after funds have been credited to your student’s account by notifying us in writing within 30 days after the date of your loan disbursement notice. Canceling your Federal Direct PLUS loan will not make your student eligible for additional unsubsidized loan amounts.
If the additional financial aid received by your student results in aid that is in excess of your student’s cost of attendance, our office will automatically reduce the appropriate loan fund. These loan funds will be returned to the U.S. Department of Education. The amount returned will appear as a charge on the student’s monthly account statement.
If your application is denied due to credit, you will receive notification from the Direct Loan Applicant Services. You may choose from the following options:
- You may try to have a credit status override completed by the servicer. Please contact the Federal Student Aid Information Center (FSAIC) 800-433-3243
- You may provide documentation to the Direct Loan Applicant Services if you have extenuating circumstances. Your request for a PLUS loan will be reviewed again by the servicer
- You may have a third-party endorser co-sign the PLUS loan application with you. Any PLUS loans with an endorser added will require a new and separate MPN be completed by the parent borrower.
- As of March 29, 2015, a PLUS borrower with an adverse credit decision who pursues an extenuating circumstance appeal or adds a credit-worthy endorser is required to complete an online PLUS counseling module at Federal Student Aid. The completion of this counseling is required before the loan can be disbursed. Direct Loans will notify the borrower if this online counseling is required.
You may choose not to pursue any of the options listed above, and your student may borrow additional funds for the current academic year through the Unsubsidized Federal Direct Loan Program. Please contact the Financial Aid Office to discuss this option.