Federal Direct PLUS

The Federal Direct PLUS loan is an optional federal loan program for parent(s) who wish to access additional resources beyond what a student is eligible to receive.  This credit-based, parent loan option may cover up to the total Cost of Attendance (COA) minus student aid.The interest rate for a Federal Direct PLUS is fixed for 2016-2017 at 6.31%.  Since the Federal Direct PLUS  is a federal loan, there are generally more benefits available in applying for this type of loan versus a student alternative loan.

Each Federal Direct PLUS Loan disbursed is charged a loan fee on the principal amount borrowed. Any Direct PLUS Loans disbursed on or after October 1, 2015, are subject to a 4.272% origination fee. The fee is applied before you receive any loan money.  Fees may change each year based on federal mandates.

To borrow a Direct PLUS Loan for a student, the parent must be the student’s biological or adoptive mother or father, regardless of whether he or she is the “custodial” parent or provided financial information on the FAFSA, or in some cases, a stepparent (see below.) More than one parent may get a Direct PLUS Loan for the same dependent student as long as the total aid package does not exceed the student’s cost of attendance.

  • A stepparent is eligible to borrow a Direct PLUS Loan if he or she is considered to be a parent in accordance with the instructions on the FAFSA for purposes of reporting financial information on the FAFSA.
  • A legal guardian is not considered a parent for federal student aid purposes.

Apply for a Direct PLUS Loan by completing BOTH steps below:

Step 1: Parent Loan Request Form:  Be sure to complete all boxes of this online form before clicking the “Submit” button located at the bottom of the Request form.  All borrowers, new and prior-year, must complete a new Parent Loan Request Form each time they wish to borrow.

Step 2: Master Promissory Note (MPN): This should be done in the parent’s name and must be completed online by logging into the StudentLoans.gov website (see top left-hand side of page) using the Federal Student Aid ID from the FAFSA. Follow the link to ‘Complete Master Promissory Note‘. DO NOT use the link that says ‘Request a Direct PLUS Loan’ since using this link does not allow for the necessary PSU steps to process this loan

Parents who had a Federal Direct PLUS loan in 2015-2016 do not need to complete a new MPN. 

Parents that either required an endorser on their MPN or were denied a Federal Direct Loan PLUS loan in 2015-2016 will need to complete both the MPN and Request Form for 2016-2017.

Important notes:

  • In order to receive a Federal Direct PLUS Loan, you must complete a FAFSA.
  • The PARENT is the only signer on this loan and is solely responsible for repayment.
  • An acceptable credit check, per government guidelines, is required to access this loan program.
  • If you do not already have an FSA ID or have lost your information,  you can go to https://fsaid.ed.gov/npas/index.htm to apply or retrieve your information.
  • Your MPN is not considered complete until you reach the screen with the following message: Thank you for submitting the MPN.
  • You may view/download the PDF version of your completed MPN.
  • If your student intends to either reduce or decline the Federal Work Study award to increase the parent’s eligibility for the Federal Direct PLUS Loan, please submit a request at least a day prior to applying for the loan.
  • The PLUS application process takes approximately one week to complete once Plymouth State University receives confirmation that the two steps listed above have been electronically submitted.
Borrowers whose Direct PLUS Loan credit checks are processed on or after March 29, 2015 and who are denied based on an adverse credit history can secure an approved endorser.  The endorser is subject to the same credit check as the applicant. Or the apparent can appeal the denial on extenuating circumstances. In both cases, the parent will be REQUIRED to complete PLUS Counseling at www.studentloans.gov. PLUS Counseling must be completed before disbursement of the Direct PLUS Loan funds.
What if my parent is ineligible to borrow a PLUS loan?
When does repayment begin?
How much will monthly payments be?
Are there any benefits for military members?


The Federal Student Aid Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans. Please do not hesitate to contact them  should you feel they can be of assistance.

Phone: 1-877-557-2575, Fax: 1-606-396-4821
Mailing Address: FSA Ombudsman Group,  P.O. Box 1843,  Monticello, KY 42633

April 7th, 2014 by Eric

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