FEDERAL 

STUDENT 

LOANS

Direct PLUS Loan 

Basics for Parents

®
2

U.S. Department of Education

Arne Duncan

Secretary

Federal Student Aid

James W. Runcie

Chief Operating Officer

Customer Experience Office

Brenda F. Wensil

Chief Customer Experience Officer

Except as otherwise noted, the content of 

this publication is not protected by copyright. 

See the back cover of this publication for a 

list of photo and image credits. Except for 

images protected by copyright, authorization 

to reproduce the publication in whole or in 

part is granted. While permission to reprint 

this publication is not necessary, the citation 

should be: U.S. Department of Education, 

Federal Student Aid, Customer Experience 

Office, Direct PLUS Loan Basics for Parents, 

Washington, D.C., 2015.

To order copies of this publication:

Students and Parents

Order online at: www.edpubs.gov

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Online Access

This publication is also available at 

StudentAid.gov/resources#loan-basics-parents.

Alternate Formats

On request, this publication is available in alternate 

formats, such as Braille. For more information, please 

contact Federal Student Aid using the information 

provided in the previous section.

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for sites created and maintained by organizations 

other than the U.S. Department of Education (ED). 

They are provided for the reader’s convenience. 

ED does not control or guarantee the accuracy, 

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All Web addresses included in this publication were 

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Find detailed federal student aid information at 

StudentAid.gov.
3

Direct PLUS Loans are available from the U.S. Department of 

Education (ED) to help parents pay the cost of their child’s education at 

a four-year college or university, community college, or trade, career, or 

technical school. 

What kinds of federal student loans are available?

ED offers four types of loans, for which it serves as the lender, through 

the William D. Ford Federal Direct Loan (Direct Loan) Program:

1. Direct Subsidized Loans—For eligible undergraduate students. 

Generally, no interest is charged on subsidized loans while a 

student is in school at least half-time, during the grace period, 

and during deferment periods.

2. Direct Unsubsidized Loans—For eligible undergraduate, 

graduate, and professional degree students. Interest is charged 

on unsubsidized loans during all periods.

3. Direct PLUS Loans—For eligible parents of dependent students. 

Graduate and professional degree students also may receive 

Direct PLUS Loans. Interest is charged during all periods.

4. Direct Consolidation Loans—For eligible student and parent 

borrowers. A consolidation loan combines the borrower’s 

eligible loans into a single loan. To learn how interest rates are 

calculated on Direct Consolidation Loans, visit 

StudentAid.gov/consolidation.

Learn more about federal student loans at StudentAid.gov/loans.

Jamie Grill/Blend Images/Getty Images
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What are the eligibility requirements for a parent to 

get a Direct PLUS Loan?

• You must be the biological or adoptive parent (or, in some cases, 

the stepparent) of the student for whom you are borrowing.

• Your child must be a dependent undergraduate student who is 

enrolled at least half-time at a school that participates in the Direct 

Loan Program. Generally, your child is considered dependent if 

he or she is under 24 years of age, has no dependents, and is not 

married, a veteran, a graduate or professional degree student, or a 

ward of the court. Learn about dependency status at 

StudentAid.gov/dependency.

• You cannot have an adverse credit history (a credit check will 

be done).

• In addition, you and your child must be U.S. citizens or eligible 

noncitizens (see StudentAid.gov/noncitizen), not be in default on 

any federal education loans, not owe an overpayment on a federal 

education grant, and meet other general eligibility requirements for 

the federal student aid programs. 

Note: You can find the general eligibility requirements for the federal student 

aid programs at StudentAid.gov/eligibility or by contacting the school’s 

financial aid office. 

Thomas Barwick/Digital Vision/Getty Images
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How do I request a Direct PLUS Loan?

Your child must complete the Free Application for Federal Student Aid 

(FAFSA®). The fastest and easiest way to complete the FAFSA is online 

at fafsa.gov, but there are several ways to complete it. Check with the 

financial aid office at your child’s college or career school for other ways 

to complete the FAFSA. You (the parent) must complete the Federal 

Direct PLUS Loan Master Promissory Note (MPN). The MPN explains 

the terms and conditions of your loan and is your legal agreement to 

repay your loan to ED. In most cases, a single MPN can be used for 

loans that you receive over multiple academic years.

The process of completing the MPN varies from school to school. 

Check with the financial aid office at your child’s school to find out the 

process for completing the MPN.

How much can I borrow? 

There are no set borrowing limits for Direct PLUS Loans, but you may 

not borrow more than the cost of your child’s education minus any 

other financial aid received, such as a Direct Subsidized Loan or Direct 

Unsubsidized Loan. The school will determine the actual amount you 

may borrow.

What is the interest rate?

The interest rate for a Direct PLUS Loan is determined annually for new 

loans that are made between July 1 of one year and June 30 of the 

following year. Each loan will have a fixed interest rate for the life of the 

loan. View the latest interest rate information at 

StudentAid.gov/interest.
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Is there a charge for a Direct PLUS Loan?

Yes. In addition to interest, you pay a loan fee that is a percentage of 

the principal amount of the loan. ED deducts the fee before you receive 

any loan money, so the loan amount you actually receive will be less 

than the amount you have to repay. See StudentAid.gov/interest for 

current loan fee rates.

How will I receive my loan money?

Your loan money will usually be paid out in at least two installments. 

Your child’s school will generally credit the loan money to your child’s 

account to pay tuition, fees, and other authorized charges. Any 

remaining loan funds will be paid to you directly, unless you authorize 

the school to pay this money to your child.

When do I have to begin repaying my loan?

The repayment period for a Direct PLUS Loan begins immediately after 

you’ve received the last disbursement of the loan, while your child is 

still in school. However, you may be able to defer making payments 

while your child is enrolled at least half-time, and for an additional six 

months after your child graduates or drops below half-time enrollment 

status. To learn more about deferment, see the discussion about 

postponing your loan payments on page 8 of this booklet and visit 

StudentAid.gov/deferment-forbearance. 

When it’s time for you to begin repaying your Direct PLUS Loan, you’ll 

make payments to your loan servicer, an organization that handles 

billing and other customer service functions related to your Direct 

PLUS Loan. The servicer will contact you after you receive your first 

Direct PLUS Loan to provide you with information about repayment 

options, and the servicer also will communicate with you throughout the 

repayment period of your loan. 
7

How much time will I have to repay my loan, and 

how much will I have to pay each month?

Generally, you’ll have from 10 to 25 years to repay your loan, depending 

on the repayment plan that you choose. Your required monthly payment 

amount will vary depending on how much you borrowed, the interest 

rates on your loans, and your repayment plan.

Choose a repayment plan that best meets your needs. The following are 

the available repayment plans for Direct PLUS Loans made to parents:

• Standard Repayment Plan—Under this plan, you’ll have fixed 

monthly payments for up to 10 years.

• Graduated Repayment Plan—Under this plan, your payments will 

start off lower and then gradually increase, usually every two years. 

You must repay the loan in 10 years. 

• Extended Repayment Plan—Under this plan, you can choose to 

make fixed or graduated monthly payments for up to 25 years. 

To be eligible for this plan, you must have more than $30,000 

in Direct Loan debt and you must not have already had an 

outstanding balance on a Direct Loan at the time you received a 

Direct Loan on or after Oct. 7, 1998. 

Note: You can find more information about each of the plans and use our 

Repayment Estimator to estimate your monthly payment under different 

repayment plans at StudentAid.gov/repayment-estimator.

You can change plans at any time. There’s no penalty if you make 

payments before they are due or pay more than the amount due 

each month.
8

Can I transfer the loan to my child for repayment?

No. A Direct PLUS Loan made to you as a parent cannot be transferred 

to your child. You are responsible for repaying the loan.

Can I ever postpone making loan payments?

Yes, under certain circumstances you may receive a deferment 

or forbearance, which allows you to temporarily stop or lower 

your payments.

You may receive a deferment in the following circumstances: 

• While you are enrolled at least half-time at a school that’s eligible 

to participate in ED’s federal student aid programs. 

• While the student for whom you obtained a Direct PLUS Loan is 

enrolled at least half-time at a school that’s eligible to participate in 

ED’s federal student aid programs.

• During the six-month period after the student for whom you 

obtained a Direct PLUS Loan ceases to be enrolled at 

least half-time.

• While you are in a full-time course of study in a graduate 

fellowship program.

• While you are in an approved full-time rehabilitation program for 

individuals with disabilities.

• While you are unemployed or meet our rules for economic 

hardship (for these conditions, deferment is limited to a 

maximum of three years). 

• While you are serving on qualifying active duty in the U.S. 

armed forces or National Guard.
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Aldo Murillo/E+/Getty Images

If you don’t qualify for a deferment but are temporarily unable to make 

loan payments for such reasons as illness or financial hardship, your 

loan servicer may grant you a forbearance. With forbearance, you 

may be able to stop making payments on your loan, temporarily make 

smaller payments, or extend the time for making payments. 

We charge interest on Direct PLUS Loans during all periods of 

deferment and forbearance. You may choose to pay the interest as it 

accrues during these periods to reduce the total amount you will repay 

on your loan. If you don’t pay the interest that accrues during a period 

of deferment or forbearance, it will be capitalized (added to your loan 

principal amount) at the end of the deferment or forbearance period. 

For more information on deferments and forbearance, including specific 

eligibility requirements, contact your loan servicer and visit 

StudentAid.gov/deferment-forbearance.
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Ariel Skelley/Blend Images/Getty Images

Can my loan ever be canceled, discharged, or 

forgiven?

You must repay your Direct PLUS Loan even if your child doesn’t 

complete or can’t find a job related to his or her program of study, or if 

you or your child are unhappy with the education you paid for with your 

loan. However, we will discharge (forgive) your loan if

• you become totally and permanently disabled (in accordance with 

ED’s definition);

• your loan is discharged in bankruptcy after you have proven to 

the bankruptcy court that repaying the loan would cause undue 

hardship; or

• you die, or the child for whom you borrowed dies.
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In certain cases, we may also discharge all or a portion of your loan if

• the school closed before your child completed the program;

• the school falsely certified your eligibility for the loan;

• your loan was falsely certified through identity theft; or

• your child withdrew from school but the school didn’t pay a refund 

of your loan money that it was required to pay under 

federal regulations.

To read more about loan discharge, visit StudentAid.gov/forgiveness.

Make Your Payments On Time With Automatic 

Payment Withdrawal 

With this option, your monthly payment will be automatically deducted 

from your checking or savings account. This helps ensure that your 

payments are made on time. In addition, you’ll receive an interest rate 

reduction on your loans as long as you remain enrolled in automatic 

payment withdrawal. Contact your loan servicer for more information.
RESOURCES

Federal Student Aid’s Website

StudentAid.gov

Get more information about the federal student aid programs, the aid 

application process, and tools for managing Direct Loans. For information 

on preparing for college or career school, applying for aid, consumer 

protection, and more, visit StudentAid.gov/resources.

StudentLoans.gov

Get more information about completing Master Promissory Notes and 

Direct PLUS Loan requests. 

Stay connected: 

/FederalStudentAid

/FAFSA

/FederalStudentAid

Printed September 2015

Photos: U.S. Department of Education except 

as noted. Getty Images photos (front cover—

image of two men, Tetra Images/Tetra Images/

Getty Images and image of two women, 

XiXinXing/XiXinXing/Getty Images—and pages 

3, 4, 9, and 10) are protected by copyright. 

Permission to use or otherwise reproduce these 

photos must be obtained directly from Getty 

Images.

Note: The information in this document was 

compiled in summer 2015. For updates or 

additional information, visit StudentAid.gov or 

call 1-800-4-FED-AID.

Notice to Limited English Proficient Persons

If you have difficulty understanding English, you may request 

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If you need more information about interpretation or translation 

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To view federal student aid publications and resources in Spanish, 

go to StudentAid.gov/recursos.