Federal Direct PLUS

The Federal Direct Parent Loan for Undergraduate Students (PLUS) offers parents an excellent low-interest loan alternative to paying for college costs during the academic year. With the Direct PLUS Loan, a family can borrow up to the difference between the cost of attendance and the amount of any financial aid the student is receiving.

Direct PLUS Benefits

Benefits of the Direct PLUS include:

  • low interest rate
  • lower monthly payments
  • an extended payment period for educational costs
  • option of deferring repayment based on student’s enrollment status

Who May Apply

To borrow a Direct PLUS for a student, the parent borrower must be the student’s biological or adoptive mother or father. A stepparent whose assets and income are taken into account when determining the student’s expected family contribution is also eligible to borrow a Direct PLUS. There is no grace period for a Federal Direct PLUS loan. Interest begins to accrue immediately after the first disbursement of the Federal Direct PLUS loan, and repayment of both principal and interest begins within 60 days after the final disbursement of the loan.

Interest Rate

Interest rate is fixed at 8.94 percent for a Direct PLUS for the 2025-2026 academic year with a first disbursement on or after July 1, 2025 and before July 1, 2026.

Loan Fees

Direct PLUS Loans whose first disbursement is made on or after October 1, 2020, and before October 1, 2026, are subject to an origination fee of 4.228 percent. Loan fees are paid before the funds are sent to the school. Therefore, the amount of the loan that will be applied to the student account will be 95.772 percent of the total amount requested (100% – 4.228% = 95.772%).

Example: If a parent requests a PLUS loan for $20,000 for the 2025-2026 school year, the origination fee will be $845.60 (4.228% of $20,000). The amount after the origination fee is the net loan amount, or $19,154.40. The loan is divided evenly between the fall and spring semesters, so $9,577.20 will be applied to the fall student account balance and $9,577.20 will be applied to the spring student account balance.

When completing the PLUS Loan Application, consider the amount that you want to be applied to the student account after all other financial aid has been applied and adjust your requested loan amount knowing that only 95.772% of what is requested will be applied to charges.

Loan Terms

There is no grace period for Direct PLUS. However, for loans disbursed after July 1, 2008, parent borrowers have the option of deferring repayment based on the student’s enrollment status. Specifically, parent borrowers may defer repayment:

  • While the student is enrolled at least a half-time, and
  • During the six-month period after the student ceases to be enrolled at least half-time

The parent borrower may complete and submit the in-school deferment request form, by visiting the Direct Loan website or by calling the Direct Loan Servicing Center (DLSC) at 800.848.0979 for assistance. If the parent borrower does not choose to defer payment, repayment begins 60 days after full disbursement of the loan.

Interest will be capitalized until repayment begins. If deferment is chosen, your parent will be sent a quarterly interest statement and will have the option of paying the interest as it accrues during the deferment period. The parent borrower may be allowed up to 30 years for repayment.

In addition, if a parent’s Federal Direct PLUS loan application is denied due to unsatisfactory credit, the student is automatically eligible for an additional direct unsubsidized loan. First- and second-year students are eligible for an additional $6,000, and third- and fourth-year students are eligible for an additional $7,000 if the Federal Direct PLUS loan is denied.

How to Apply

  1. Apply for the Federal Direct Parent PLUS loan by completing the PLUS Loan Application with the Department of Education (ED). This is required each year. Include in the application the amount you would like to borrow. Note that if you request a fixed amount, and need to borrow more later in the academic year, you will need to complete a new PLUS Loan Application.
  2. First time parent borrowers must complete the Federal Direct PLUS Loan electronic Master Promissory Note. Parent borrowers must use their own FSA User ID and not their child’s FSA User ID to complete the PLUS loan request process.
  3. First time parent borrowers must submit the Authorization for Direct PLUS Loan Payment of Allowable Charges (PDF) to the Office of Financial Aid.