PLUS Loans

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What are Plus Loans?


Plus Loans are federal student loans for parents of dependent undergraduate students (PLUS Loans) and graduate and professional students (Grad PLUS Loans). PLUS Loans can help cover the remaining cost of tuition if there is a gap after receiving other federal aid/loans.


How are PLUS Loans different from other federal loan programs?


PLUS Loans are the only federal loan program that requires a credit check. Bad credit can adversely affect your PLUS Loan application and can result in application denial. If credit history is an issue, parents or eligible students can have a co-signer with good credit help apply for the PLUS Loan.


Am I eligible to receive a PLUS Loan?


If you are the parent of a dependent undergraduate student or are a graduate or professional student enrolled at least half-time in an eligible school, you do not have adverse credit history and meet the FAFSA application eligibility guidelines then you are eligible to receive for a PLUS or GRAD PLUS Loan.


What is the interest rate on a PLUS Loan?


The interest rate on a PLUS loan is fixed for the life of the loan which means that it will not go up or down and will remain the same for the duration of the loan until you either pay off the loan or if the loan is discharged for any reason.


The current fixed interest rate is 7%. This applies to Direct PLUS Loans for 2017/18.


How do I apply for a PLUS Loan?


The first step in applying for a PLUS Loan is filling out the FAFSA (Free Application for Federal Student Aid). The PLUS Loan application is a separate application from the FAFSA. There are a few different ways to apply for the PLUS Loan so it is best to check with the school you or your child plan on attending to find out their process of requesting a PLUS Loan.


In addition to completing a FAFSA (Free Application for Federal Student Aid) and applying for a PLUS Loan separately, what other requirements must I meet in order to receive a PLUS Loan?


After you have been approved for a PLUS Loan, you will need to fill out a master promissory note before you can receive funds. It is a legal and binding contract saying that you will pay back the loan. In addition to signing a master promissory note, you may be required to go to entrance counselling. Entrance counseling will help you manage your student loans both during and after graduation in order to prevent defaulting on your loan.


When will I be required to repay my PLUS Loan?


Repayment on a Parent PLUS Loan usually begins no later than 60 days after the loan is fully disbursed. Parent borrowers are eligible to defer payments when their dependent undergraduate is still enrolled in school at least half-time and also during the 6 month grace period after their child graduates, leaves school, or drops below half-time enrollment.


Graduate and professional students who have taken out GRAD Plus Loans do not have to start re-paying on their loan while they are still in school at least half-time. There is a 6-month grace period after you graduate, leave school, or drop below half-time enrollment.


Keep in mind that interest continues to accrue for both Parent PLUS and GRAD Plus Loans during these deferment periods.