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Federal Direct Parent PLUS Loan Description
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The Parent Loan for Undergraduate Students (PLUS) is a federal direct loan that parents apply for on behalf of their dependent undergraduate student(s). It enables parents with good credit history to assist their children who are enrolled at least half time (6 credits per semester) at a post-secondary school. The loan’s interest rate is variable. Each July 1 it will change; however, it will never exceed 9%. The rate announced as of July 1, 2008 is 7.9% for the Federal Direct Parent PLUS loan.
For your convenience, the PLUS brochure provides additional information.
Parent PLUS Application Process
- Complete the appropriate year's Federal Direct PLUS Loan Application, form # 7 on our Forms page. It can be printed from there or can be obtained at Student Financial Aid Services. Be sure to review the section on the application that releases PLUS funds to the student.
- Send the completed application to Student Financial Aid Services. Upon approval of the federal credit check, you will be notified of the outcome by the federal processor. Credit checks for the academic year begin in mid July.
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If the Federal Direct PLUS loan is approved, a Master Promissory Note (MPN) must be signed. This can be done with a paper note or an electronic note.
a. In order to complete the electronic MPN, a federal PIN number is required. If you (the parent) completed an online FAFSA using a federal PIN number, you have already fulfilled this requirement. If you did not, one can be acquired at the PIN website. You should receive the requested information within two days via e-mail.
b. Using the PIN number you have received, go to the MPN website and read the instructions. Then, click on the blue “Proceed to PIN Site Registration” button and enter your information. Once the note has been completed, our office will retrieve the information and continue processing the loan. This can be done at any time.
c. If you do not complete an electronic MPN, a paper MPN will be sent to you. Complete the form and return it to the office of Student Financial Aid Services.
Loan proceeds are split between two semesters. The first half will be used to pay student expenses as soon as possible on or after the first day of the fall semester. The second half will pay expenses for the spring semester.
How Much Can I Borrow?
A common question for parents who wish to pursue a Federal Direct PLUS loan is, “how much can I borrow?” To answer this question, a brief description of how we determine eligibility will help.
Students who have been awarded financial aid also have a budget as part of their award package. The student budget or cost of attendance represents a ceiling or cap in the total amount of financial aid our office can provide. Parents may borrow PLUS loan funds up to a student’s budget minus all other financial aid and resources.
See example below:
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Cost of attendance: this figure is for illustration purposes only
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$15,520
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Total financial aid: offered in other loans, grants, Work-Study, etc.
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-$8025
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Resources: such as tuition/fee waivers, Veteran’s benefits, Voc Rehab,
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-$1000
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Remaining PLUS eligibility:
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$6495
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We encourage all parent Federal Direct PLUS loan borrowers to review costs with their student/s and to borrow only that amount that will help ensure their success. If you have any questions about the PLUS loan or other financial aid matters, please call us at (208) 885-6312 or email finaid@uidaho.edu.
Can I Defer My Payments?
For a PLUS loan disbursed on or after July 1, 2008, traditionally, parent PLUS borrowers enter repayment 60 days after their loan was fully disbursed. For most borrowers, this would result in PLUS payments starting during the month of March. By calling the Direct Loan Servicer, you can request a deferment of payments as long as the student is enrolled at least half time (6 credit hours). Parents can request deferment while the student is enrolled AND for a 6 month grace period after the student graduates. Keep in mind, interest will accrue if your PLUS loan payments are deferred. The Direct Loan Servicer number is: 1-800-848-0979.
Options if a Parent PLUS loan is Denied
- If a parent is denied for the Federal Direct PLUS loan, the parent may re-apply using a credit-worthy co-signer. Our office will send you an information sheet and an Endorser Addendum to complete the co-signer process.
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Parents may appeal a Federal Direct PLUS loan denial by contacting the credit bureau reported on your federal denial letter. This letter will provide contact information as well as a specific reject code to assist you in the appeal process.
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If the parent does not re-apply with a co-signer, it is possible for the student to apply for additional Unsubsidized Direct Loan instead. The following Unsubsidized Direct Loan limits may be added to the student borrower’s combined Subsidized and Unsubsidized Direct loan limits:
- Up to $4000 for a first or second year student
- Up to $5000 for a third, fourth, or fifth year undergraduate.
If you wish to pursue the Unsubsidized Direct loan, please complete a Federal Direct PLUS Appeal Form and forward it to the Office of Student Financial Aid Services.
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