Federal Direct Parent PLUS Loan
Families looking for long-term financing may wish to consider the Federal Direct Parent PLUS Loan to finance their child's education.
The student must:
Be considered a dependent for the purposes of receiving federal need-based aid;
Be enrolled at least half-time (6 units) in undergraduate status;
Be enrolled in the number of units indicated in your Financial Aid Summary;
Submit all required documents; and
Maintain Satisfactory Academic Progress.
The loan is for undergraduate students only, but must be taken out in the parents name. It is not based on the student's financial need. No collateral is required.
The Federal Direct Loan Servicer will perform a credit check to ensure the parent meets the federally established credit criteria. Parents who do not meet the criteria can apply with an endorser (co-signer) who does.
The parent and student must be U.S. citizens or eligible non-citizens. The parent must be the biological or adoptive parent, or stepparent, of the student and the parent's credit must be free of the following adverse items:
Currently 90 days or more delinquent on repayment on any debt.
Debt placed in collection or written off within the past two years.
Evidence of a bankruptcy, default, discharge, foreclosure, tax lien, repossession, wage garnishment, or write-off of a debt during the past five years.
Collection accounts or charge-offs with a balance greater than $2,085.
If the parent is considered ineligible for the Federal Direct Parent PLUS Loan due to adverse credit, they may still participate in the PLUS Loan program through an approved appeal or approved endorser (co-borrower) application. Borrowers approved with endorsers or appeals will need to complete PLUS Counseling. More information regarding the PLUS Loan Credit appeals, endorser applications, and PLUS Counseling can be found on studentaid.gov.
If the parent is considered ineligible for the Federal Direct Parent PLUS Loan: The student may be able to borrow an additional Federal Direct Unsubsidized Stafford Loan, up to $4,000 or $5,000.
If the student borrows an additional Unsubsidized Federal Direct Stafford Loan and the parent is subsequently approved for a Federal Direct Parent PLUS Loan in the same academic year, the Financial Aid Office will cancel the additional Unsubsidized Stafford Loan and process the Federal Direct Parent PLUS Loan.
Fixed at 5.30 percent for loans first disbursed between July 1, 2020 - June 30, 2021.
Fixed at 7.08 percent for loans first disbursed between July 1, 2019 - June 30, 2020.
Repayment: The ten-year repayment period begins six (6) months after you graduate, withdraw or drop below half-time enrollment. To reduce the cost of borrowing, consider making interest-only payments while you are in school.
Disbursement: Generally disbursed in two equal parts, one at the beginning of each semester.
Penalties: There is no penalty for early repayment.
A Federal Origination Fee will be deducted from each disbursement:
4.228 percent for all loans made on or after October 1, 2020 and before October 1, 2021.
4.236 percent for all loans made on or after October 1, 2019 and before October 1, 2020.
Benefits of the Federal Parent PLUS Loan
You do not need to submit your tax returns to the Financial Aid Office.
You can borrow up to the USC estimated cost of attendance, including tuition, mandatory fees, room and board, books and supplies, and even transportation, less other aid received.
Either parent may apply for the loan, or both parents may apply for separate Federal Direct Parent PLUS loans.
Low fixed interest rate.
No prepayment penalty.
No required income-to-debt ratio.
Credit checks are less strict than those for private student loans.
Parents who do not meet the credit requirements may apply with a co-signer (called an "endorser").
Parents can postpone payments up to 60 months while student is in school.
Payment flexibility: Income-sensitive, graduated and extended payment options.
Accrued interest capitalizes once at repayment.
Federally insured against death and disability.
How to Apply
Visit studentaid.gov complete the Federal Direct Parent PLUS Loan request.
Sign in, then click on Request a Direct PLUS Loan.
Once you have completed the process, the Department of Education will notify us electronically.
Credit is checked once every 180-days for those with multiple applications.
If you did not apply for need-based aid, you must also submit a.
Complete and submit a Free Application for Federal Student Aid (FAFSA) online.
Receiving Your Funds
Once the Financial Aid Office processes your Parent PLUS Loan and notifies the Department of Education, we will e-mail you confirmation.
After your loan has been approved by the Department of Education, you will be able to sign your Master Promissory Note (MPN) online at studentaid.gov.
You and your parent will need the FSA ID issued to you by the Department of Education when you completed your FAFSA. If you need an FSA ID or have forgotten it, you can retrieve it through studentaid.gov.
Your parent will not be required to complete a new MPN if:
He or she previously borrowed a Federal Direct Parent PLUS Loan for you at another school.
The existing MPN for a Federal Direct Parent PLUS Loan is not more than 10 years old.
Your parent was approved for that loan without an endorser.
In order for your Parent PLUS loans to disburse for the academic year, all parent borrowers must complete an Annual Student Loan Acknowledgment on studentaid.gov. The purpose of this acknowledgement is to help you understand how your loans affect your financial future. Borrowers accepting a subsidized/unsubsidized loan, a PLUS loan for graduate/professional students, or a PLUS loan for parents must complete this acknowledgement.