The Federal Direct PLUS Loan is a federal loan for parents of dependent undergraduate students or Graduate students pursuing an advanced degree. It is a fixed interest rate loan and has minimal credit requirements. Parents of dependent undergraduate students or Graduate students may borrow up to the cost of attendance minus any other financial aid the student receives. For more information on terms, interest rates, and repayment options, please go to the Federal Student Aid website.
Step 1: PLUS Loan Application
- The parent that plans to borrow must have an FSA User ID (used to sign the FAFSA)
- To create an FSA User ID go to ed.gov
- Graduate students use the FSA User ID and password they already have created
- To login go to studentloans.gov and enter the applicable FSA User ID and password.
- Select "Apply for a Direct PLUS Loan".
- Select "Start" next to Direct PLUS Loan Application you want to apply for.
- Complete the required fields — School & Loan Info, Borrower Info, Review and Credit Check & Submit.
- Note: Please make sure you select a loan for the 2019-2020 year.
Step 2: PLUS Loan Master Promissory Note
(Complete only if approved for a PLUS Loan, and you wish to take the loan.)
- The borrower must go to studentloans.govand log in using the FSA ID.
- Select "Complete Loan Agreement (Master a Promissory Note)."
- Select "Start" next to PLUS MPN for Parents."
- Complete the required fields: Information, References, review & Edit, and Sign & Submit.
PLUS Loan options
Loan amount: When completing the Direct Federal PLUS Loan application, borrowers are given the option of entering a specific loan amount, or can select the “maximum” option.
Things to consider when determining the amount to borrow:
- The government charges a 4.248% fee on PLUS Loans. If applying for the exact balance, consider factoring in this fee to avoid a shortage. The origination fee will change effective 10/01/2019.
- Only borrow what you need. The current interest rate on the PLUS Loan is 7.08%. This rate will remain in effect through July 1, 2020.
- Maximum loan: If the "maximum amount" option is selected on the Federal Direct PLUS loan application, Norwich Financial Aid will award to maximum amount allowed in the student budget, which is above estimated billed costs, allowing students to borrow for travel, books, etc.
If denied the PLUS loan there are several options of how to move forward.
- Pursue endorser: Re-apply with an endorser (cosigner).
- Appeal: Appeal the reason your credit was denied to the Department of Education.
- Student Loan eligibility increases:Undergraduate dependent student's eligibility for Federal Direct Unsubsidized loan increases by $4,000 (for Freshmen and Sophomores) or $5,000 (for Juniors and Seniors) if a parent is denied and chooses not to appeal the decision.
- Choose to not pursue the PLUS loan or additional Federal Direct Unsubsidized Loan.