Direct PLUS Loans

Direct PLUS Loans are federal loans designed to help graduate or professional students and parents of dependent undergraduate students finance their education expenses. These loans are part of the William D. Ford Federal Direct Loan Program and are funded directly by the U.S. Department of Education.

Eligibility Criteria

• Parent PLUS Loans: Available to biological or adoptive parents (and, in some cases, stepparents) of dependent undergraduate students enrolled at least half-time at an eligible institution.
• Graduate PLUS Loans: Available to graduate or professional students enrolled at least half-time in an eligible program leading to a graduate or professional degree or certificate

Applicants must not have an adverse credit history. A credit check is conducted during the application process. If an applicant has adverse credit, they may still qualify by obtaining an endorser without adverse credit or by documenting extenuating circumstances.

Borrowing Limits

The maximum loan amount is the student's cost of attendance (determined by the school) minus any other financial aid received. This includes tuition, fees, room and board, books, supplies, transportation, and miscellaneous expenses.

Interest Rates and Fees

• Interest Rates: For Direct PLUS Loans first disbursed between July 1, 2024, and June 30, 2025, the interest rate is fixed at 9.08% for the life of the loan.
• Loan Fees: All Direct PLUS Loans have a loan fee, which is a percentage of the loan amount and is deducted proportionally from each disbursement. For loans first disbursed on or after October 1, 2024, and before October 1, 2025, the loan fee is 4.228%.

Repayment Terms

• Repayment Start: Repayment begins once the loan is fully disbursed. However, borrowers may request a deferment while the student is enrolled at least half-time and for an additional six months after the student graduates, leaves school, or drops below half-time enrollment.
• Repayment Plans: Graduate or professional student borrowers can access all federal student loan repayment plans, including Income-Driven Repayment (IDR) plans. Parent borrowers have more limited options; to access IDR plans, they must first consolidate their PLUS Loans into a Direct Consolidation Loan.

Loan Cancellation and Forgiveness

In certain circumstances, such as the borrower's death or total and permanent disability, a PLUS Loan may be discharged. Additionally, loans may qualify for forgiveness programs like Public Service Loan Forgiveness (PSLF) if specific criteria are met. For example, a Direct PLUS Loan made to a parent borrower is eligible for PSLF, but it cannot be paid via a qualifying repayment plan other than the 10-year Standard Repayment Plan unless consolidated.

Application Process

1. Complete the FAFSA: Both the student and the parent (for Parent PLUS Loans) or the graduate/professional student (for Graduate PLUS Loans) must complete the Free Application for Federal Student Aid (FAFSA).
2. Apply for the PLUS Loan: Submit a Direct PLUS Loan application through the Federal Student Aid website.
3. Complete a Master Promissory Note (MPN): Sign the MPN, agreeing to the loan's terms and conditions.

Additional Considerations

• Credit Counseling: Applicants with adverse credit who qualify by obtaining an endorser or documenting extenuating circumstances must complete credit counseling before receiving the loan.
• Interest Accrual: Interest accrues on PLUS Loans during all periods, including while the student is in school and during deferment or forbearance periods. Borrowers may choose to pay the interest as it accrues or allow it to capitalize (be added to the principal balance).

Direct PLUS Loans provide financial assistance to parents of dependent undergraduate students and to graduate or professional students who need additional funding beyond other federal student aid. While Graduate PLUS Loans have access to income-driven repayment plans, Parent PLUS Loans require consolidation to qualify for certain repayment options, making it essential for borrowers to carefully review their choices before applying.