The Federal Direct Parent PLUS Loan

On This Page

› The requirements for borrowing a Parent PLUS Loan.

Interest rate, loan fees, and repayment terms.

› How you'll find out if your student's award includes a Parent PLUS Loan.

› Steps to requesting a loan.

› Steps you can take if the loan is denied due to an adverse credit history.

› When you'll get the funds.

 

The Federal Direct Parent PLUS Loan enables you to borrow money that will help your dependent, undergraduate student pay for his/her educational expenses.

2014-15 academic year download, complete and submit the PDF form Request for a Federal Direct Parent PLUS Loan.

Note: You need Adobe Reader installed on your computer to download the PDF form. For a free copy of Adobe Reader, link to Adobe and follow instructions.

Parent PLUS Loan Eligibility Requirements

The requirements for borrowing a Parent PLUS Loan are as follows.

  • Parent must be the student's biological or adoptive mother or father.
  • If divorced or separated, either parent may borrow the Parent PLUS Loan.
  • If the parent has remarried, the stepparent's information must be included when completing the Free Application for Federal Student Aid (FAFSA). In this instance, a stepparent (whose information appears on the FAFSA) is also eligible to borrow the Parent PLUS Loan.
  • The parent must be either a United States citizen, a permanent resident or other eligible non-citizen. If the parent is a non-citizen—
  • The parent cannot have an adverse credit history.
  • The parent cannot be in default on a federal education loan.
  • The parent cannot owe an overpayment on a federal education grant.
Getting a Parent PLUS Loan

You and your student must first complete the FAFSA.

A Parent PLUS Loan will be estimated as part of your dependent student's award.

Submit the Request for Federal Direct Parent PLUS Loan form to us.

Heads Up! Make sure your student checks AidLink often for important messages.

The Parent PLUS Loan Interest Rate and Loan Fee

The interest is 7.21% fixed rate on Parent PLUS Loans funded July 1, 2014 through June 30, 2015.

The loan fee on a Parent PLUS Loan is 4.288% (4.292% on a loan first disbursed October 1, 2014 or after) of the amount borrowed.

A Parent PLUS Loan Award and Request

A Federal Direct Parent PLUS Loan estimate is part of your dependent student's financial aid award. To begin the process to borrow the funds, you must submit a Request for a Federal Direct Parent PLUS Loan form.

Apply for financial aid

  • Your dependent student applies for financial aid by completing the FAFSA.
  • Include SDSU's federal school code which is 001151 on the FAFSA.

The application is processed and award is made

  • Your student will receive an e-mail from the Office of Financial Aid and Scholarships with instructions on how to logon to AidLink and access his/her aid application and award.
  • A dependent student's award will include a Parent PLUS Loan estimate, if eligible.

Information verification may be required

  • About 30% of all aid applicants are randomly selected to submit documentation that verifies the information on the FAFSA.
  • Make sure your student checks his/her AidLink account often for messages and action he/she may need to take.

Borrowing a Parent PLUS Loan

Note: You need Adobe Reader installed on your computer to download the PDF form. For a free copy of Adobe Reader, link to Adobe and follow instructions.

  • After the Office of Financial Aid and Scholarships receives the completed Request for a Federal Direct Parent PLUS Loan form, we electronically submit your information to the Direct Loan Servicing Center.
  • The Servicing Center will transmit the information to a credit bureau for evaluation. An acceptable credit history is necessary to continue the Parent PLUS Loan process.
  • The parent borrower must complete and sign a Direct Parent PLUS Master Promissory Note at the Federal Student Loans Web site.
  • Request the full amount you will need for the entire academic year. Increases are limited to one per semester. Half of the requested amount will be disbursed during the fall semester and one half during the spring.

Denied Parent PLUS Loan

The parent borrower must pass a credit evaluation before the loan will be approved. If denied, the Direct Loan Servicer will notify the parent borrower and explain why the credit evaluation was denied and provide the name and address of the credit bureau that supplied the credit data.

The Office of Financial Aid and Scholarships will notify the parent via e-mail to determine if the parent borrower wants to:

  • appeal the credit decision with the Direct Loan Servicer, or
  • reapply for the loan with an endorser (cosigner), or
  • request that SDSU cancel the Parent PLUS Loan and have the student borrow additional unsubsidized Federal Direct Student Loan. The additional amount depends on the student's remaining loan eligibility (there is an annual limit based on grade level) and cost of attendance.
    • Additional unsubsidized loan may be no more than $4,000 for a freshman or sophomore.
    • Additional unsubsidized loan may be no more than $5,000 for a junior or senior.

If your Parent PLUS Loan was denied, review your options on the Denied Parent PLUS Loan form.

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Disbursement - Receiving Financial Aid Funds

Student Account Services is the department that releases the Parent PLUS Loan funds after receiving the necessary information from the Office of Financial Aid and Scholarships.

You're Approved - Now What?

If you applied early,
and all conditions are met, half of the loan amount will be available at the beginning of each semester.

We do not begin to prepare a Parent PLUS Loan for disbursement until all conditions listed below have been met.

  • Student must have received a financial aid award.
  • Student must be enrolled in at least 6 units.
  • All financial aid holds must be cleared.
  • Any Student Account Services holds must be cleared.

University charges and postponed payments

Basic tuition and fees, out-of-state tuition, and on-campus housing payments are deducted from the student's financial aid which includes the approved amount of Parent PLUS Loan. Any remaining Parent PLUS Loan funds are mailed to the parent borrower or, the parent borrower may authorize any remaining loan funds to be deposited directly to the student's designated bank account.

The student is responsible for paying any additional charges because of adding a class or a change of housing type or meal plan. If the student's financial aid funds are not sufficient to pay all charges for the semester, the student is responsible for making the payments as they become due.

Earliest disbursement time

If you apply and complete the Parent PLUS Loan process early, and all the required conditions are met, you may receive the Parent PLUS Loan funds at the beginning of the semester. You'll find more information about financial aid disbursement at Receiving Your Funds.

One-half of the Parent PLUS Loan is disbursed during the fall and the second half during the spring. Plan ahead and request the full amount you will need for the entire academic year. Increases are limited to one per semester.

Repaying the Parent PLUS Loan

Repayment usually begins within 60 days after the loan is fully disbursed (typically the spring semester).

Exception - You may request that repayment be deferred while your student is enrolled at least half time. However, unpaid interest accumulates and capitalizes which means the interest is added to the loan principal, thus increasing the amount of loan and its total cost.

Calculate your payments before you borrow

  • Go to the Direct Loan Repayment Calculator Web page.
  • Select "Direct PLUS" as the Loan Type.
  • Enter various loan amounts until you find a match with your needs.
  • Click on the "Calculate" button to view the estimated monthly payment.

Useful Links

For detailed information on Direct Loans, go to the Direct Loan section of the Federal Student Aid Web site.

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