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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!

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.
    For optimal experience, users should visit this site in Chrome or Firefox web browsers, Internet Explorer is not supported.
    • 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
    • To begin the applications, click Start
    • Complete the application, including the student information, deferment options, credit balance options, etc.
    • A Credit Check will be initiated at the end of the applications with immediate results. Credit Checks expire after 180 days.
  • The loan will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and schools determined to be authorized users of the data system.
  • Parent first-time borrowers must complete the Master Promissory Note for a Federal Direct Parent PLUS Loan.
  • Complete the Annual Student Loan Acknowledgment each year (optional)
  • Receive Approval/Denial. 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 Unsubsidized Direct Loan based on the student's eligibility (up to $5000 additional). 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 and submit it to the Office of Student Financial Aid.

Amount

A parent may borrow up to the student's cost of attendance minus any financial aid (for example, grants, scholarships, work-study, federal student loans) the student is already receiving for the school year.  Not sure how much to request?  Contact our office for assistance. Reminder the University must have written permission from the student before releasing information from the student's record (Proxy Access).  For more information regarding Proxy Access visit Proxy Access.

Interest Rates and Fees

The interest rate is fixed and capitalizes annually. Loans are subject to an origination fee upon disbursement. Current rates and fees are published quarterly here: https://studentaid.gov/understand-aid/types/loans/interest-rates.

Payment may be deferred if the student is enrolled half-time. Contact Federal Student Loans to request deferment.

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 cancelation form within 14 days of disbursement. Go to the Loan Adjustment page for the form.

Repayment

To find out more about repayment options before receiving a Direct Loan, borrowers may contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).

In addition, visit repayment.