Federal Direct Parent (Plus) Loan

The U.S. Department of Education administers a loan program for students called the Federal Direct Parent (PLUS) Loan. Parents can borrow a PLUS Loan to help pay your education expenses if you are a Dependent, undergraduate student enrolled at least half-time in a degree seeking program. Parents must be creditworthy.  Legal guardians, aunts, uncles and grandparents are not eligible to borrow a Federal Parent PLUS Loan. 

How much can my parent(s) borrow?

The annual limit on a Federal Direct Parent (PLUS) Loan is equal to LMU’s Estimated Cost of Attendance minus any other financial aid you receive. For example, if your cost of attendance is $10,000, and you receive $6,000 in other financial aid, your parents can borrow up to $4,000.

What is the interest rate?

For Direct PLUS Loan interest rate is fixed at 7.9%. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.

What are the fees?

The Direct PLUS Loan program requires a 4% fee (3% origination fee + 1% default fee). There's an up-front rebate of 1.5%, so the net disbursement is 97.5% of the gross loan amount. The borrower must make the first 12 payments on time to keep the rebate.

Can more than one parent borrow a PLUS loan on my behalf?

If a student's parents are divorced, both the custodial and non-custodial parent may borrow a PLUS loan for their dependent, undergraduate student. A step-parent who has not adopted the student may only borrow a PLUS loan if they are married to the custodial parent and their financial information was reported on the FAFSA of record.

When do my parent(s) begin repaying the loan?

The borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or to begin repayment six months after you graduate or cease to be enrolled on at least a half-time basis. Visit www.studentloans.gov for more information.

How do my parents apply for a PLUS Loan? NO LONGER ACCEPTING 2011-2012 APPLICATIONS

STEP 1: Student and parent must complete the Free Application for Federal Student Aid

STEP 2: The parent borrower must complete an LMU Direct Parent PLUS Loan Application. Although you may choose to complete a PLUS Loan application through the Department of Education when you complete your PLUS Loan Master Promissory Note, that application will not replace the LMU Direct Parent PLUS Loan Application required by the LMU Financial Aid Office. Your PLUS loan will not be processed until we receive this document.

STEP 3: After the LMU Direct Parent PLUS Loan Application is received, we will initiate a credit check for the parent borrower with the US Department of Education.  The parent borrower will receive notification of the credit decision directly from the Direct Loan program.  The student's PROWL account will also be updated to reflect the credit decision. 

STEP 4: The parent borrower must complete a Direct Parent PLUS loan Master Promissory Note (MPN) online with the Department of Education.


My parent borrowers' credit was not accepted. What are my options?

Endorser - The borrower can re-apply for a PLUS loan with an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Parent PLUS Loan if the parent does not repay the loan. The PLUS Loan endorser cannot be the student. The endorser will required to obtain a federal PIN. The endorser will then need to visit www.studentloans.gov to apply to be an endorser for the Parent PLUS loan.

Appeal - The borrower may appeal the adverse credit decision if they believe extenuating circumstances may exist. Visit www.studentloans.gov for more information

Unsubsidized Federal Stafford Loan - Students whose parent's are denied a PLUS loan may qualify to receive additional Unsubsidized Federal Stafford Loan.  You must submit a Revision Request Form to the Financial Aid Office at least 14 days prior to the end of the term in order to be considered. 

Private (Alternative) Loan - Students may apply for a private (alternative) loan. We encourage private (alternative) loans to be borrowed as a last resort. Click here for more information.

Questions?
Questions related to your PLUS loan credit decision, the endorser process or obligations, or the www.studentloans.gov website can be directed to the US Department of Education's Applicant Services Department at 1 (800) 557-7394. 

Direct PLUS Loan Disclosures