Direct Parent PLUS Loan
Parents of dependent students may apply for loans from a non-need-based program, the Ford Federal Direct Parent PLUS Loan Program. The parent may borrow an amount up to the cost of attendance minus other financial aid. At disbursement, the funds will first be transferred into the student’s University account to pay for on-campus charges, e.g., tuition and fees, room and board, and other school charges. If any money remains, the parent of the student will receive the balance, unless the parent designates that the student should be the recipient.
- The interest rate is fixed at 7.9 percent, as of July 1, 2006.
- Interest begins to accumulate on the date of the first loan disbursement.
- A 4 percent origination fee is deducted from each disbursement. A 1.5 percent rebate is currently added back to your disbursement.
- Repayment begins after the loan is fully disbursed, with the first payment due within 60 days after the final loan disbursement.
- As of July 1, 2008, parent borrowers may choose to defer payments on a Parent PLUS loan until six months after the date the student ceases to be enrolled at least half time. Accruing interest can either be paid monthly or quarterly, or be capitalized quarterly.
How to obtain a deferment
Parent borrowers must call the Direct Loan Servicing Center (DLSC) at 800-848-0979 to request a deferment based on the dependent student's enrollment status. Currently there is no available deferment form that a parent borrower may use to request this deferment.
When requesting a deferment, a parent borrower must indicate whether he or she wishes to defer repayment only while the dependent student is enrolled on at least a half-time basis, or both while the student is enrolled and during the 6-month period after the student ceases to be enrolled on at least a half-time basis. If a parent borrower does not request a deferment, the first payment on the loan will be due within 60 days after the loan is fully disbursed.
Interest during deferment
Interest will accrue during the deferment period. The parent borrower will be sent quarterly interest statements and will have the option of paying the interest as it accrues during the deferment period. If the parent does not pay the interest as it accrues, the unpaid accrued interest will be capitalized (added to the principal balance) at the end of the deferment period.
The loan must have an initial disbursement date on or after July 1, 2008. Direct PLUS loans disbursing prior to July 1, 2008 are not eligible for this deferment. The loan does not have to be fully disbursed in order for a parent borrower to request a deferment based on the dependent student's enrollment status. Deferment periods may vary if a parent borrower has eligible Direct PLUS Loans for more than one student. A separate deferment request must be made for each Direct PLUS Loan obtained on behalf of a different student.
Promissory Note required
If you (the student) accept a Direct Parent PLUS Loan, your parent (the borrower) will be required to complete a PLUS Master Promissory Note (MPN) and an Active Confirmation form. You, the student, do not complete any part of either document. Your parent can sign the required MPN electronically with their U. S. Department of Education -issued PIN. If they don't already have their PIN, they can request one on the official PIN site. The Active Confirmation form is available at Forms Online to download and print off. Once completed, the Active Confirmation form is returned to the Office of Student Finance.
The PLUS MPN can be used to make one or more loans for one or more academic years, and in most cases, the parent borrower may then receive additional PLUS Direct loans for that student at that school for up to 10 years without completing a new PLUS Direct MPN. However, the parent borrower is required to confirm and accept the loan debt incurred by completing an Active Confirmation form for each PLUS Direct Loan.