Federal Direct PLUS Loans (Undergraduates)

Federal Direct PLUS Loans (Undergraduates)

The Federal Direct Parent Loan for Undergraduate Students (PLUS) is available to parents of dependent undergraduate students who want to borrow funds to help pay for educational costs.

Application:  Parents may apply online.  Parent borrowers applying for the loan will complete the Federal Direct PLUS Loan Master Promissory Note Application (PLUS MPN).  A parent borrower using the PLUS MPN will usually need only to sign a promissory note once for each student, at the time they first borrow.  To request additional funding in the same or subsequent years, the parent borrower may do this online 

Deadline:  Federal Direct PLUS Loan applications must be certified by the Office of Financial Aid by the last day of the semester.  In order for the loan to be disbursed, the parent borrower must have a valid master promissory note (PLUS MPN) and submitted a Federal Direct PLUS Loan Request Form before the last day of enrollment for the term in which the loan is processed.  The student must be enrolled at least half-time at the time of disbursement.

Eligibility:  Parent borrowers must be the dependent student's biological parent or adoptive parent.  A stepparent is also eligilbe to borrow a PLUS loan only if their income and assets were used on the dependent student's Free Application for Federal Aid.  A legal guardian is not considered an eligible borrower.  Both parents may receive a PLUS loan as long as the total aid package does not exceed the student's cost of attendance.   In addition the borrower must be a citizen or eligible non-citizen, not in default on a federal student loan, not owe a refund on any federal student aid program, and is credit worthy.  A parent is not eligible for a PLUS loan if the federal government holds a judgement lien on their property or it they are incarcerated.  General eligibility requirements, as previously discussed, must be satisfied by all students to receive Federal Direct PLUS Loan assistance.

Loan Limits per Academic Year:  The maximum parents may borrow in Federal Direct PLUS Loan per academic year is the difference between cost of education minus other financial aid received.

Aggregate Loan Limits:  There is no aggregate limit.

Interest Rate:  Interest rates vary depending upon when the loan was first disbursed.  Federal Direct PLUS Loans first disbursed prior to July 1, 2014 are at a fixed rate of 6.41%.  For loans first disbursed on or after July 1, 2014 and prior to July 1, 2015 are are at a fixed rate of 7.21%.

Fees:  In addition to the interest,  an orignation fee is charged.  This amount is deducted from the loan amount at time of disbursement.  For loans first disbursed prior to October 1, 2014 the rate is 4.288%.  For loans first disbursed on or after October 1, 2014 and before October 1, 2015 the rate is 4.292%

Loan Reductions/Cancellations:  Parents may request the Federal Direct PLUS Loan be reduced or canceled.  The request must be in writing from the parent borrower, not the student.  Please include parent borrower's name, the student's name, the student's Bloomsburg University ID Number, and the amount you want the loan reduced to.  If the request is made prior to disbursement of funds, please send the request to the Office of Financial Aid.  Once disbursement of funds has been made, parents have 30 days to request the Business Office to return funds.

Repayment:  Beginning July 1, 2008, parents may choose to defer payments on a PLUS loan until six months after the date the student ceases to be enrolled at least half-time.  Accruing interest may either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.  A parent may take between 10 and 25 years to repay the loan, depending upon the amount owed and the type of repayment plan selected.  Parents may also pay the balance of the loan, plus any interest due, early and without a penalty.