FAQ | Direct PLUS Loans for Parents (Parent PLUS Loans) •
– Disbursed October 1, 2018 to October 1, 2019 Loan Fee: 4.248%
What is a Parent PLUS loan? •
•
Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school. A Direct PLUS Loan is commonly referred to as a “Parent PLUS Loan” when made to a parent, and as a “Grad PLUS Loan” when made to a graduate or professional student.
What are the basic rules? •
Be the biological or adoptive parent (or in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time at an eligible school;
•
not have an adverse credit history (unless you meet certain additional requirements);
•
and meet the general eligibility requirements for federal student aid. (Your child must also meet these requirements.) NOTE: Grandparents, unless they have legally adopted the dependent student, are not eligible to receive Parent PLUS Loans, even if they have had primary responsibility for raising the student.
How much can you borrow? •
The maximum PLUS Loan amount you can borrow is the cost of attendance at the school your child will attend, minus any other financial assistance your child receives. (The cost of attendance is determined by the school.)
What is the current interest rate? •
For Direct PLUS Loans first disbursed between July 1, 2019 and July 1, 2020: 7.08% (This is a fixed interest rate for the life of the loan.)
Other than interest, is there a charge for Direct PLUS Loans? •
16
Yes, there is a loan fee on all Direct PLUS Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement.
The percentage varies depending on when the loan is first disbursed, for example:
– Disbursed October 1, 2019 to October 1, 2020 Loan Fee: 4.236%
Do I have to make payments on my loan while my child is still in school? •
If you request a deferment, you will not need to make payments while your child is enrolled at least half-time and for an additional six months after your child graduates, leaves school, or drops below half-time enrollment.
•
If the school your child is attending requires you to submit your request for a Parent PLUS Loan at StudentLoans.gov, you will have the option of requesting a deferment as part of the loan request process. You can also contact your loan servicer to request a deferment.
•
If you do not request a deferment, you will be expected to begin making payments after the loan is fully disbursed (paid out). – During any period when you are not required to make payments, interest will accrue on your loan. – You may choose to pay the accrued interest or allow the interest to be capitalized (added to your loan principal balance) when you have to start making payments. Your loan servicer will notify you when your first payment is due.
