Print This PageFederal Direct PLUS Loans
Parents of dependent students can get Federal Direct PLUS Loans, which are low-interest loans to help parents meet college costs. Additionally, graduate or professional students are now eligible to borrow through the PLUS Loan Program (more information about this program is found at the end of this section).
Under the Direct Loan Program, funds are provided by the U.S. Department of Education, rather than by a bank or other financial institution. You work only with your school and the U.S. Department of Education servicer instead of commercial lenders and guarantee agencies.
How do I apply?
To apply for a Direct PLUS Loan, you need to complete the Direct PLUS Loan application, available from your school. While completion of the Free Application for Federal Student Aid (FAFSA) is not required to receive a PLUS Loan, we encourage you to complete the FAFSA to be considered for other types of assistance.
Before you receive your first Direct PLUS Loan, you (the parent borrower) must sign a Master Promissory Note (MPN) that you'll obtain from your student's school or from the U.S. Department of Education. You may be able to complete the MPN on the Web, using the same PIN you used to sign your student's FAFSA. The school will disburse your loan money by crediting it to your student's school account and providing a refund of the credit balance to you.
How much can I borrow?
The loan limits for Direct Loans are the same as for FFEL Program loans.
What are the interest rates?
Beginning with loans first disbursed after July 1, 2006, Federal PLUS Loans have a fixed interest rate of 7.9%. (Loans disbursed prior to July 1, 2006, will continue to have a variable interest rate. This can result in a borrower having loans at different interest rates.)
Is there a fee charged for these loans?
The U.S. Department of Education subtracts 3 percent from your loan's principal balance to reduce the cost of making these low-interest loans.
When do I have to start repaying my loan?
Generally, you'll have from 10 to 30 years to repay your loan, depending on the repayment plan that you choose. Your monthly payment amount will be based on how much you borrowed and how long you take to repay. You may choose one of three repayment plans:
- Standard Repayment Plan: Fixed monthly payments for up to 10 years.
- Graduated Repayment Plan: Payments that start off lower, and then gradually increase. You'll repay your loan in full within 10 years.
- Extended Repayment Plan: Fixed annual or graduated repayment amount paid over a period up to 25 years (only for new borrowers on or after October 7, 1998, with $30,000 in outstanding loans accumulated on or after that date).
You can change repayment plans at any time, and there's no penalty if you make payments before they are due or pay more than the amount due each month. You can find more information about these plans by contacting the Direct Loan Servicing Center or by visiting
Direct Loans on the Web.
Can my loan be cancelled or forgiven (discharged)?
You must repay your loan even if your student doesn't complete the program, can't find a job related to the program of study, or if you or your dependent is unhappy with the education you paid for with your loan. However, the U.S. Department of Education will forgive (discharge) your loan if you have your loan discharged in bankruptcy, if you become totally and permanently disabled (additional conditions apply), or if you die or if the child for whom you borrowed dies.
There are other, less common circumstances under which some or all of your loans may be forgiven, such as if the school closes before your student completed the program, if the school forged your signature or falsely certified that your student was eligible for aid, or if your student dropped out of school and the school did not pay a refund of your loan money that it was required to pay under federal regulations.