Federal Direct Parent PLUS Loans are offered through the U.S. Department of Education's Federal Direct Loan Program and are available to assist parents / step-parents of the dependent student in supporting educational expenses.. To be eligible, the parent borrower must not be in default on any federal education loans and must be a U.S. citizen or eligible non-citizen. The Federal Direct Parent PLUS Loan requires a separate loan application and credit approval by the Department of Education.
Application Process
- The student must have a Free Application for Federal Student Aid (FAFSA) on file for the 2011-2012 academic year.
- Complete a Federal Direct Parent PLUS Application
- The Parent PLUS Loan will be included as estimated financial aid into the student's financial aid account so the loan information may be sent to the Department of Education for credit decision.
- The Department of Education will notify IU of the Parent PLUS Loan credit decision.
- If the credit is approved, the Parent PLUS Loan will remain as part of the student's financial aid account. An email notification will be sent to the parent's email address listed on the PLUS Loan application if a Master Promissory Note (MPN) must be signed.
- The MPN may be completed online. Visit our MPN page for details
- The MPN will be valid for 10 years provided a PLUS Loan is disbursed within 12 months of the MPN signing.
- Parents must use their federal PIN to successfully complete the online PLUS MPN. If you do not have a federal PIN, you can apply for one online at www.pin.ed.gov.
- If the Parent PLUS Loan credit decision is denied, the Parent PLUS Loan will be removed from the student's financial aid account and will not be included as part of the estimated financial aid awarded to the student.
- Direct Loans will automatically send the parent borrower a letter advising the outcome of credit decision. If denied,contact information will be provided on how to to appeal the credit decision or to obtain an endorser.
- If the credit denial is overridden by an appeal or the receipt of an endorser, Direct Loans will automatically notify IU of the credit approval and the Parent PLUS Loan will be included in the student's financial aid awards.
- If the Parent PLUS credit decision is denied and the parent is not going to appeal the credit decision or obtain and endorser, the student is eligible to receive an additional unsubsidized Stafford loan.
- Freshman/Sophomore students eligible to receive an additional unsubsidized Stafford loan of up to $4,000 for the academic year
- Junior/Senior students are eligible to receive an additional unsubsidized Stafford loan of up to $5,000 for the academic year
- This option is not available to the student if one parent is denied and another parent is subsequently approved for a Parent PLUS Loan.
Loan Details
- The interest rate for Parent PLUS Loans under the Direct Loan program is 7.9% with an origination fee of 4%..
- Parent PLUS Loans must be processed no later than the final day of the term for which the student was enrolled. Students must also clear any holds that may be on their financial aid account before processing can occur.
- Repayment begins 60 days after the loan is fully disbursed. The parent borrower may contact their Servicer to request to defer payments until six months after the student graduates or drops below half-time enrollment. (Deferment Requirements)
