Federal Direct Parent PLUS Loans
Federal Direct Parent PLUS Loans are loans parents may apply for on behalf of their dependent student. Your student must be admitted into a degree-seeking program and enrolled at least half-time (six credits). You must be the natural/adoptive parent or stepparent whose information was included on the FAFSA to be an eligible borrower.
Applying for Parent PLUS Loan
To apply for a Parent PLUS loan go to www.studentloans.gov, use your FAFSA PIN to sign in and then click on the Request PLUS Loan link. New PLUS borrowers must also complete a Parent PLUS Master Promissory Note (MPN) at the same Website. Additional information about the Parent PLUS Loan can be found here.
A Parent PLUS loan is contingent on a credit check of the parent borrower who does not have an adverse credit history and is not based on debt-to-income ratio. Your loan will be reported to credit agencies and become part of your credit history.
Federal Regulations classify an individual as having an adverse credit history if they are 90 days or more past due on any debt or have been subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a debt during the five years preceding the date of the credit check.
If the Parent PLUS Loan is denied, the parent can choose to secure a credit-worthy endorser (co-signer) or the student may contact Financial Aid Services for consideration of an additional Federal Direct Unsubsidized Loan. For additional information about the process of using an endorser, the parent should contact the Direct Loan Servicer at 1-800-557-7394.
Interest Rate and Fees
The Parent PLUS loan has a fixed rate of 7.21% for loans disbursed on or after July 1, 2014, and a loan fee of 4.292%. Additionally, the interest rate is subject to change annually on July 1 when the rate is adjusted in accordance with the financial markets. Rate changes will impact loans disbursing after July 1, 2015. Interest accrues beginning on the date the loan first disburses and until it is paid in full.
Repayment and Deferment
Repayment begins 60 days after loan is fully disbursed. The repayment term will be 10-25 years depending upon the type of repayment plan selected. There is no grace period for this loan. Parents have the option to defer payments for PLUS Loans, provided the designated student is enrolled at least half-time (six credits) each semester. The parent should check the deferment box on their electronic loan application when submitting their application through studentloans.gov to be eligible for the deferment.
At Montana State University, we encourage students and families to make informed decisions about financial aid. We highly recommend that you borrow only the amount of loans you need to successfully complete your education.