What is a Direct PLUS loan?
Direct PLUS loans are federal loans that graduate or professional degree students or parents of dependent undergraduate students can use to help pay for education expenses.
have a fixed interest rate and are not subsidized, which means that interest accrues while the student is enrolled in school. To qualify for a Direct PLUS Loan, you must pass a credit check. You will also be charged an origination fee, which is deducted from the loan disbursement before you or your school receives the funds.
Grad PLUS loans
Grad PLUS loans allow graduate and professional students to borrow money to pay for their own education. Graduate students can borrow Grad PLUS loans to cover any costs not already covered by other financial aid or grants, up to the full cost of attendance. There is no cumulative limit to how much graduate students may borrow.
To qualify for a Grad PLUS loan, you must meet three criteria:
- Be enrolled at least half-time at an eligible school in a graduate or professional program.
- Pass a credit check. If you cannot pass the credit check, you can still be approved for a Grad PLUS loan if you obtain an endorser(someone who agrees to pay the Grad PLUS loan if you do not repay it) or are approved by the Department of Education through an explanation of extenuating circumstances related to your adverse credit history.
- Meet the .
Parent PLUS loans
Parent PLUS loans allow parents of dependent undergraduate students to borrow money to cover any costs not already covered by the student’s financial aid package, up to the full cost of attendance. The program does not set a cumulative limit to how much parents may borrow. Parent PLUS loans are the financial responsibility of the borrowing parent, not the student, and cannot be transferred to the student upon the student’s completion of school.
To qualify for a Parent PLUS loan, you must meet three criteria:
- Be the biological or adoptive parent (or in some cases, the stepparent) for a student enrolled at least half-time at an eligible school. Grandparents and legal guardians are not eligible to borrow Parent PLUS loans, even if they have primary responsibility for raising the student, unless they have legally adopted the dependent student.
- Pass a credit check. If you cannot pass the credit check, you can still be approved for a Parent PLUS loan if you obtain an endorser (someone who agrees to pay the Parent PLUS loan if you do not repay it) or are approved by the Department of Education through an explanation of extenuating circumstances related to your adverse credit history.
- Meet the general eligibility requirements for federal student aid.
Parents with Parent PLUS loans must start repaying them as soon as the loan is fully disbursed to the student or the school. However, you can request a delay in making payments while your child is in school and for an additional six months after they graduate, leave school, or drop below half-time enrollment by requesting a deferment. Contact your loan servicer for more information about how to delay making payments. You are still responsible for the interest that accrues while the payments are postponed.
Repayment Options for Parent PLUS Loans
Borrowers of Parent PLUS loans qualify for three repayment plan options:
Parent PLUS borrowers may also qualify for an additional repayment plan to reduce monthly payments, the (ICR Plan).You can become eligible by consolidating your Parent PLUS loan into a Direct Consolidation Loan. However, if you have federal student loans for your own education, do not consolidate them with your Parent PLUS loans because your other federal student loans can lose access to certain repayment options.
Learn more about Parent PLUS loan repayment options.
- Your employment for each month is with a qualified employer.
- You are enrolled in an income-driven repayment plan. For Parent PLUS borrowers, that requires you to consolidate the loan into a Direct Consolidation Loan and enter into the . Enrolling in the Income-Contingent Repayment plan may also reduce your monthly payments. If you have federal student loans for your own education, do not consolidate them with your Parent PLUS loans because you will lose time already credited for PSLF on those loans.