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. You 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.
Credit Information
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 creditworthy 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
The Parent PLUS loan has a fixed rate of 7.9%. Interest accrues after the first disbursement is made until the loan is paid in full.
Fees
There is a 4% origination fee with an immediate 1.5% rebate at disbursement for loans made prior to July 1, 2012. Rebate is retained on loans made prior to July 1, 2012 if the parent makes 12 consecutive monthly payments on time. There is no rebate for loans made after July 1, 2012.
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 that were originated after July 1, 2008, provided the designated student is enrolled at least half-time (six credits) each semester. The parent should contact the Direct Loan Servicing Center at 1-800-848-0979 after the loan has been fully disbursed to request deferment.
***IMPORTANT NOTE FOR PARENTS: If you are applying for the 2012-2013 year, we strongly encourage you to wait until 5/01/12 as the credit check is only valid for 90 days. Applying too early may cause delays with processing and disbursements.
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.
Last updated 3/30/11
