Print This Page

Federal PLUS Loans

Federal PLUS loans are available through either the Federal Family Education Loan (FFEL) Program or the William D. Ford Federal Direct Loan ("Direct Loan") Program. The terms and conditions of a FFEL PLUS Loan and a Direct Loan are similar. The major differences between them are the source of the loan funds, some aspects of the application process, and the available repayment plans. If you attend a Direct Lending school, learn more about the application process, including the interest rate, fees charged and repayment on our page about Federal Direct Loans.

Under the FFEL PLUS Loan Program, the funds for your loans are provided to you from a bank, credit union, or other lender that participates in the FFEL Program. If your school participates in Direct Loans, the school gets the funds for your loan directly from the U.S. government.

What types of PLUS loans are available?

Federal PLUS loans are low-interest loans that are not based on financial need. Borrowers are responsible for all interest that accrues.

  • Parent PLUS Loans are loans borrowed by the parent (natural or adoptive) on behalf of a dependent undergraduate student to help pay for educational expenses.

  • Graduate and Professional Student PLUS Loans are loans borrowed by graduate and professional students. Applicants will be required to use their annual loan maximum for both the Federal Subsidized and Unsubsidized Federal Stafford Loan Program before applying for a Graduate/Professional PLUS loan.

Who is eligible?

Applicants must not have an adverse credit history. Students must attend an eligible school at least half-time and applicant (and student) must be a U.S. citizen or an eligible non-citizen.

How do I apply?

To apply for a student loan, as well as to find out if you are eligible for federal grants and work-study, students must complete a Free Application for Federal Student Aid (FAFSA). While completion of the FAFSA is not required for parents to receive a PLUS loan, we encouraged you to complete the FAFSA to be considered for other types of assistance.

If you are eligible for a Federal PLUS Loan, you will be provided a Master Promissory Note (MPN), which is a legal agreement of repayment that you sign with your lender. If you need to choose an eligible lender, check with your school for assistance. Use of the MPN allows you to receive multiple loans under one note for a maximum ten-year period. (Direct Loans have a different application process.)

How much can I borrow?

A school's financial aid office determines how much applicants may borrow. The amount depends on the school's cost of attendance (includes tuition, fees and an estimate of other expenses reasonably related to attendance at school) and any other financial aid which the student may receive. The loan cannot exceed the cost of attendance. For example, if your cost of attendance is $6,000 and you receive $4,000 in other financial aid, your loan amount could be up to, but no more than, $2,000. There are no annual or aggregate loan limits for PLUS loans.

What are the interest rates?

Federal PLUS loans have a fixed interest rate of 8.5 percent. (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.) Borrowers are responsible for paying all interest that accrues on the loan. While the student is in school, borrowers may either make interest payments or have it added to the principal of the loan. Each time the interest is added to your loan's principal, the total amount you will repay increases.

Is there a fee charged for these loans?

The lender subtracts 4 percent from your loan's principal balance for origination and default fees. The Department of Education receives 3 percent, and the guarantor collects the remaining 1 percent. These fees help cover the costs of the loan program. (Direct Loans have a different fee structure.)

How will I receive my loan?

After your promissory note has been signed and approved, your school will notify you of the approved loan amount and the anticipated disbursement date. Typically, the loan funds will be sent to your school in two or more installments. Your loan money must first be used to pay for your tuition, fees, room and board, and other school charges. If loan money remains, you (or your parent) will receive the funds usually by check, unless written permission is given to the school to place funds in student's account.

When do I have to start repaying my loan?

The first payment on Federal PLUS loans is due within 60 days after full disbursement, unless you qualify for a deferment. Contact your lender for deferment eligibility requirements. The minimum monthly payment is $50. However, the actual payment will depend on the total amount borrowed. For most repayment plans, borrowers have a maximum of 10 years to pay off the loan.

For more information on repaying your loan, see Tips on Borrowing and Repaying Student Loans or visit the Oklahoma Guaranteed Student Loan Program website.

Can my loan be cancelled or forgiven (discharged)?

A loan can be cancelled or forgiven only under specific circumstances. A discharge releases you from all obligations to repay your loan. For more information on the qualifications for a cancellation, see Tips on Borrowing and Repaying Student Loans or visit the
Oklahoma Guaranteed Student Loan Program website.