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Federal Direct Parent PLUS Loan

Parents may be eligible to borrow a Federal Direct Parent PLUS Loan to help defer the education expenses for their dependent undergraduate students. Parent PLUS applications are available at StudentAid.gov!

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, resulting in changes to federal student aid programs. Some of these changes went into effect immediately, while others will go into effect next year and beyond.

Eligibility

Student must:

  • Have a valid Free Application for Federal Student Aid (FAFSA) on file;
  • Be fully admitted as a degree-seeking student at ISU;
  • Be enrolled at least half–time when the loan is expected to be disbursed;
  • Maintain Satisfactory Academic Progress (SAP) standards;
  • Be a U.S. Citizen or eligible non-citizen;
  • Not be in default on an educational loan or owe an overpayment on a federal education grant, or other federal debt, or has made satisfactory arrangements to repay that debt.

The parent borrower:

  • Must be the biological or adoptive parent of the student or a step-parent whose income is reported on the student's completed FAFSA application.
  • Must be a U.S. Citizen or National or Permanent Resident/Other Eliglble Non-Citizen
  • Must not be in default on an educational loan or owe an overpayment on a federal education grant, or other federal debt, or has made satisfactory arrangements to repay that debt.
  • Must be creditworthy.
    • Regulations provide that a PLUS loan applicant has an adverse credit history if:
      • The applicant has a history of bankruptcy, foreclosure, tax lien, or a default determination; and
      • The applicant has one or more debts that are 90 or more days delinquent or that are in collection or have been charged off during the two years preceding the date of the applicant's credit report, but only if the total combined outstanding balance of those debts is greater than $2,085.
      • Thus, absent any other adverse credit history finding a PLUS Loan applicant whose credit check shows that the total of any debts that are 90 or more days delinquent or that have been placed in collection or charged off is $2,085 or less will not be considered to have adverse credit and therefore, will be eligible for a PLUS Loan.
    • If denied, students may be considered for additional Federal Direct Unsubsidized Loans. See below for details.

How to Apply

  • Student needs to file the Free Application for Federal Student Aid (FAFSA).
  • Parents complete the electronic application available at StudentAid.gov
    • Borrowers will need to have their own FSA ID (this includes Parents).
    • Parents logs into StudentAid.gov
    • From the Account Dashboard select I'm a Parent, then Apply for a Parent PLUS Loan
    • A Credit Check will be initiated at the end of the applications with immediate results. Credit Checks expire after 180 days.
  • The parent (borrower) will receive notification directly from the U.S. Department of Education on approval/denial. Individuals denied a Federal Direct Parent PLUS Loan have the following options:
    • The parent may be approved with an endorser (co-signer) who agrees to repay the Federal Direct Parent PLUS Loan in the event the parent does not. The endorser may not be the student on whose behalf a parent obtains a Federal Direct Parent PLUS Loan.
    • The student may apply for an additional Unsubsidized Direct Loan based on the student's eligibility (up to $5000). The parent must check the box on the PLUS denial application that indicates they do not want to pursue an endorser or are Undecided. Then, the student will need to complete an Additional Unsubsidized Loan Request form located in the Sycamore Root.

Amount

Effective July 1, 2026: All parents (combined) may borrow $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged).

Legacy Provision: The student must remain continuously enrolled in the same program of study at the same institution as they were enrolled as of June 30, 2026, AND either the parent borrower must have had a Parent PLUS Loan disbursed for that same program before July 1, 2026, OR the student must have had a Direct Loan (subsidized or unsubsidized) disbursed for that same program before July 1, 2026. 

  • If the above requirements are met, the new Parent PLUS Loan limits do not apply while the student is completing their program, for up to 3 years, provided the student remains continuously enrolled (i.e., does not withdraw or otherwise cease enrollment outside of scheduled breaks or non-required terms, such as summer). 

Parents of current students who do not currently meet these criteria can still qualify for this limited exception to the new loan limits if the parent borrows a Parent PLUS Loan prior to July 1, 2026, OR the student borrows a Direct Loan (subsidized or unsubsidized) prior to July 1, 2026.

Loan Repayment, Interest Rates and Fees

Information on interest rates and fees may be found here: https://studentaid.gov/understand-aid/types/loans/interest-rates.  

Payment may be deferred if the student is enrolled half-time. Learn more about loan deferment and repayment at https://studentaid.gov/understand-aid/types/loans/plus/parent.

Disbursement of Funds

  • Loan funds are applied to student accounts approximately ten days before the start of the semester.
  • Half of the amount applied for is disbursed at the start of the fall semester and the other half at the start of the spring semester.
  • Funds will first cover direct educational expenses on the student's account.
  • Any excess funds are refunded to either the parent or student depending on the option the parent selected at the time of the application (excludes summer semesters). Direct Deposit is not available for parent PLUS loans.
  • Borrowers have the right to cancel all or a portion of the loan with no penalty by submitting a loan cancellation form within 14 days of disbursement.