The Federal Direct Parent PLUS is a federal loan that a parent with a good credit history may borrow to help pay the educational expenses of an undergraduate student enrolled at least half-time.
A parent may borrow up to the total of the Estimated Cost of Attendance, less all other financial aid received by the student. The 2013-14 Estimated Cost of Attendance for an undergraduate Illinois resident can be found on our Budget Worksheet. There is no cumulative limit to the amount of PLUS loans that can be taken out over the course of an undergraduate student’s career. Filing a FAFSA is required to receive a PLUS loan. The interest rate is currently fixed at 7.9% and is charged on the loan from the time the loan funds are disbursed until it is paid in full.
Origination and default fees, totaling 4.204 %, are deducted from PLUS Loans. For example, a PLUS Loan in the amount of $1000 will result in a net disbursement of $958.
After reviewing the information below, if you have any further questions you can contact Direct Loans Borrower Customer Service at 800-557-7394.
With convenience for parent applicants in mind, NIU has recently streamlined the Parent PLUS application process. Effective Summer 2013, NIU no longer requires a paper application for the Parent PLUS. PLUS Loans are now directly applied for on the StudentLoans.gov website. A Federal PIN is required for the parent to apply for the PLUS Loan, as well as to sign a Master Promissory Note. If the parent in question has not yet created a PIN, this can quickly and easily be accomplished at the Federal PIN site.
The Direct PLUS Loan request consists of four sections:
The applicant provides basic demographic information about both the student and themselves, and submits to a credit check. They also indicate the amount they wish to borrow. A specific amount can be requested, or the borrower can ask for the maximum amount they are eligible to receive. This maximum amount is determined by the school, and as mentioned above is equal to the total of the Estimated Cost of Attendance, less all other financial aid received by the student.
On the School and Loan Information section, applicants are asked to specify a Loan Period. If the student in question plans to enroll for both the Fall and Spring semester, then the full academic-year period (Fall and Spring) must be selected. The Spring-only period should only be selected for students who will not be attending in the Fall.
Once the parent has been approved, the final step will be to sign a Master Promissory Note, which is available on the same website as the PLUS Application. Please ensure that the Parent PLUS Master Promissory Note is the one that is completed, as multiple MPNs are available on the site.
Eligible Parent PLUS applicants must be either:
In addition, the parent borrower must be either a U.S. citizen or an eligible non-citizen, and must not be in default or owe a refund to any financial aid program. The student must be enrolled at least half-time (6 hours in the Fall or Spring, or 3 hours in the Summer).
The parent must submit to a credit check by the United States Department of Education to be eligible for a Federal Direct Parent PLUS Loan. You authorize the credit check when you sign the Federal Direct Parent PLUS Loan Request Form. To be approved the parent must have a satisfactory credit history. However, income-to-debt ratio is not considered.
If your financial aid does not cover all of your educational or living expenses, PLUS Loans are not necessarily your only option. Private Student Loans from a number of national lenders are available to borrowers with good credit. Information about these alternative loans can be found on our site.
NIU also offers a payment plan, called the Huskie Installment Plan (HIP). This program may prove beneficial to those who plan to pay some or all of their charges for a given semester out-of-pocket. Information about HIP can be found on the Bursar Office website.
If the Federal Direct Parent PLUS disbursement generates a refund after University charges are paid, the refunded amount will go to the parent unless the parent borrower indicates on the PLUS application that they authorize any refund to be sent to the student.
If a Federal Direct Parent PLUS Loan Application is denied, it may be possible for the student to borrow an additional amount of the Unsubsidized Direct Loan in their own name. The dependent student annual maximum allowable loan limit will be replaced by the independent student maximum allowable loan limit at the same academic level. For freshman and sophomore students, the additional amount will usually total $4000, while juniors and seniors will usually qualify for $5000. If a parent chooses to use an endorser, information about this process will be provided from and should be submitted back to Direct Loan Servicing. Options for when a PLUS is denied are included on the application. The SFAO will proceed based on the choice made on the application. If a change to the originally selected option is necessary, the student should contact the SFAO for more information.
Repayment begins within 60 days of the final loan disbursement during the academic year. Principal and interest payments may be deferred if the borrower meets deferment requirements. An in-school deferment may be available for a borrower whose student is enrolled at least half-time in a degree-seeking program, but is not automatic. To learn more about available deferments and how to apply for deferment status, please contact the U.S. Department of Education's Processing Center at 800-848-0979.
Typically, the length of repayment will be between 10 and 25 years, depending on the amount owed and which repayment plan is selected by the parent.