Direct PLUS Loans

Direct PLUS Loans

For Graduate and Professional Degree Students

Graduate and professional degree students can borrow a Direct PLUS Loan to help cover education expenses.

The terms and conditions for issuing the loan depend on the credit history of the applicant. The Direct Plus Loan has a fixed interest rate of 7.9%.
You are required to complete the Free Application for Federal Student Aid (FAFSASM). In addition, before you can receive a PLUS Loan, your school must have determined your maximum eligibility.

Note: Before July 1, 2010, Stafford, PLUS, and Consolidation Loans were also made by private lenders under the Federal Family Education Loan (FFEL) Program. As a result of recent legislation, no further loans will be made under the FFEL Program beginning July 1, 2010. All new Stafford, PLUS, and Consolidation Loans will come directly from the U.S. Department of Education under the Direct Loan Program.

For a PLUS Loan, you must complete a Direct PLUS Loan Application and Master Promissory Note (MPN). The MPN is a legal document in which you promise to repay the loan and any accrued interest and fees to the Department. It also explains the terms and conditions of the loan. In most cases, one MPN can be used for loans that you receive over several years of study, although a separate Loan Request must be filed for each school year. If you previously signed an MPN to receive an FFEL PLUS loan, you will need to sign a new MPN for a Direct PLUS Loan.

The maximum PLUS Loan amount you can borrow is your cost of attendance (determined by the school) minus any other financial assistance you will receive.

Interest rate cap for military members—If you qualify under the Service Members Civil Relief Act, the interest rate on loans you obtained before entering military service may be capped at 6% during your military service. You must contact your loan servicer to request this benefit.

In addition, we do not charge interest (for a period of no more than 60 months) on Direct Loans first disbursed on or after October 1, 2008, while a borrower is serving on active duty or performing qualifying National Guard duty during a war or other military operation or other emergency, and serving in an area of hostilities qualifying for special pay.

Read more about  Direct PLUS Loans for Graduate and Professional Degree Students

Direct PLUS Loans for Parents



Parents of dependent students may apply for a Direct PLUS Loan to help pay their child’s education expenses as long as certain eligibility requirements are met.

To be eligible for a Direct PLUS Loan for Parents:

  • The parent borrower must be the student’s biological or adoptive parent. In some cases, the student’s stepparent may be eligible.
  • The student must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Programs. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional degree student, or a ward of the court.
  • The parent borrower must not have an adverse credit history (a credit check will be done). If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so. The parent may also still receive a loan if he or she can demonstrate extenuating circumstances.
  • The student and parent must be U.S. citizens or eligible non-citizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the federal student aid programs. For additional information on eligibility requirements, go to the student aid eligibility page.

The Education Department will send the loan funds to the student’s school. In most cases, the loan will be disbursed in at least two installments, and no installment will be more than half the loan amount. The school will use the loan money first to pay the student’s tuition, fees, room and board, and other school charges. If any loan funds remain, the parent will receive the amount as a check or other means, unless he or she authorizes the amount to be released to the student or transferred into the student’s account at the school. Any remaining loan funds must be used for the student’s education expenses.

Note: Before July 1, 2010, Stafford, PLUS, and Consolidation Loans were also made by private lenders under the Federal Family Education Loan (FFEL) Program. As a result of recent legislation, no further loans will be made under the FFEL Program beginning July 1, 2010. All new Stafford, PLUS, and Consolidation Loans will come directly from the U.S. Department of Education under the Direct Loan Program.

For a Direct PLUS Loan, the parent must complete a Direct PLUS Loan Application and Master Promissory Note (MPN). The MPN is a legal document in which the borrower promises to repay the loan and any accrued interest and fees to the Department. It also explains the terms and conditions of the loan. In most cases, one MPN can be used for loans that a parent receives over multiple academic years although a separate Loan Request must be filed for each school year. If the parent previously signed an MPN to receive an FFEL PLUS loan, he or she will need to sign a new MPN for a Direct PLUS Loan.

The annual limit on a PLUS Loan is equal to the student’s cost of attendance minus any other financial aid the student receives.
For example, if the cost of attendance is $6,000 and the student receives $4,000 in other financial aid, the student’s parent can request up to $2,000.

The interest rate is fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.
The parent will also pay a fee of 4% of the loan amount, deducted proportionately each time a loan disbursement is made.

The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment:

  • while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and
  • for an additional six months after the student ceases to be enrolled at least half-time.

The Direct PLUS Loan Program for parents offers three repayment plans-standard, extended, and graduated-that are designed to meet the different needs of individual borrowers. The terms differ between the repayment programs, but generally borrowers will have 10 to 25 years to repay a loan.

Read more about Direct PLUS Loan for Parents

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