What is a Direct Parent PLUS Loan For Parents?

What is a Direct Parent Plus Loan

Direct PLUS Loans for Parents are federal loans designed to assist graduate students and their parents in paying their educational expenses. Unsubsidized PLUS Loans carry interest charges throughout their duration.

Parent PLUS loans do not depend on financial need alone; rather, a credit check and Master Promissory Note must be signed before repayment can begin; repayment options include deferment until six months post-graduation and deferral until then.

What is a Direct PLUS Loan?

Federal Direct PLUS Loans for Parents are credit-based federal education loans designed to aid dependent undergraduate students’ parents. With flexible loan limits and an unsubsidized interest rate of 8.05, these loans accrue interest while your child attends school or defers.

Parent borrowers must apply online and complete a Master Promissory Note (MPN) outlining the loan terms. Suppose an adverse credit history (as defined by an MPN) prevents you from qualifying for a PLUS loan. In that case, additional safeguards may help: partnering with creditworthy endorsers on your application form could work, or there could even be another loan offer with different terms available to you.

When PLUS funds are disbursed, they will first be applied to your student’s account before being released to you as a parent (or with prior authorization). Any loan fees will then be subtracted proportionately from each disbursement before principal and interest payments can be made according to an agreed-upon arrangement between the borrower and the lender.

How do I apply for a Direct PLUS Loan?

Parent borrowers apply online for a PLUS loan through the Department of Education website. To be eligible, parents must be either biological, legal adoptive parents (or, in some cases, stepparents) of eligible undergraduate dependent students enrolled at least half-time and pass a credit check. If an adverse credit history exists, an endorser or evidence of extenuating circumstances might need to be provided. Once approved, the school receives disbursement funds that apply toward tuition and fees before any remaining funds are either sent back out to parents by check or released directly back into circulation via student.

A Direct PLUS loan could be a smart solution if your child has exhausted other financial aid forms. Parents can defer repayment until at least half-time attendance ceases; up to six months post-cessation or below half-time participation occurs before repayment becomes due; however, interest charges still accrue during this deferment period.

What are the eligibility requirements for a Direct PLUS Loan?

Primary eligibility requirements for federal student aid for biological or legally adopted parents of dependent undergraduate students enrolled at least half-time require meeting general eligibility requirements and passing a credit check. If an adverse credit history prevents you from qualifying, apply with an endorser who acts like a cosigner on private student loans or demonstrate extenuating circumstances to explain its occurrence.

Parent PLUS Loans allow you to borrow up to the cost of attendance minus any financial aid received, with deferment options during each academic year your student enrols at least half the time. Interest continues accruing until graduation or the loan disbursement; payments should start upon graduation or allocation of loan funds. Like other federal student loans, Parent PLUS Loans qualify for standard repayment and more flexible plans such as income-contingent or public service loan forgiveness options.

What are the repayment options for a Direct PLUS Loan?

Parent PLUS Loan applications involve both an electronic application and a Master Promissory Note, with deferment periods that last between one year during school enrollment and six months after graduation (though interest will still accrue during these deferment periods).

Parents can borrow up to the cost of attendance minus any financial aid awarded to their student, with loan funds disbursed directly to your school and applied directly towards tuition expenses. You have the option of using these loan funds towards additional charges as well.

If your credit is poor, apply with an endorser with strong credit to increase the chances of approval for the loan. In addition, consolidate federal Parent PLUS loans into one Direct Consolidation Loan before starting repayment under an Income-Contingent Repayment (ICR) Plan in which monthly payments are limited to 20% of discretionary income; after 25 years, any remaining debt will be forgiven.


In conclusion, a Direct Parent PLUS Loan is a valuable financial tool for parents supporting their child’s education. At Advance Capital Now, we recognize the significance of parental contributions to higher education. Our commitment is to provide clear insights into the Direct Parent PLUS Loan, offering personalized guidance to ensure parents can make informed decisions that align with their child’s academic aspirations.

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