How to Conquer the Parent PLUS Loan Application in 6 Easy Steps

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

Once you know how to apply for a parent PLUS loan, you can get the funds you need to help your child pay for college. These federal loans are available to parents who want to help their dependent undergraduate student cover college costs.

Just be careful not to borrow too much, since these loans come with a 7.08% interest rate for the 2019 – 2020 school year and can be tough to pay back. If your research into loan options has led you to parent PLUS loans, this guide will teach you how to apply, step by step.

How to apply for a Parent PLUS loan in 6 steps

By following the steps we list below for your parent PLUS application, you’ll have a clear path for obtaining a parent student loan.

1. Fill out a FAFSA and review your student aid award
2. Determine if you’re eligible for a parent PLUS loan
3. Figure out how much you can borrow
4. Decide on a final loan amount
5. Complete a parent PLUS loan application
6. Sign a PLUS Master Promissory Note

1. Fill out a FAFSA and review your student aid award

First, fill out a Free Application for Federal Student Aid (FAFSA) with your child. The Federal Student Aid office uses the information from this packet to determine your need and eligibility for financial assistance (such as parent PLUS loans) to pay for college.

To complete a FAFSA, you and your child first need to create FSA IDs. Make sure you remember your FSA ID; you’ll need it when you submit your parent PLUS loan application.

Once you submit the FAFSA and it has been processed, your child will receive a financial aid award summary. It should list all financial aid the Department of Education has approved for your child, so see if parent PLUS loans are listed.

2. Determine if you’re eligible for a parent PLUS loan

Before you apply for a parent PLUS loan, it’s helpful to check if you’ll qualify for this type of federal student loan.

And don’t just go off your child’s financial aid award letter. Even if parent PLUS loans are included, you’ll need to meet the eligibility guidelines. On the other hand, you might be able to borrow through Parent PLUS loans even if they aren’t listed on the award letter.

Eligibility requirements for parent PLUS loans include the following:

  • You must be the biological or adoptive parent of a current student.
  • Your child must be a dependent undergraduate enrolled at least half time at a college that participates in the federal direct loan program.
  • You and your child must meet all other eligibility requirements for federal student loans.
  • You must not be in default on any federal student loans.
  • Your credit must not be “adverse.” The Department of Education defines an adverse credit history as one that includes a current delinquency of 90 days or longer. It also includes borrowers who have certain derogatory marks within the past five years, such as bankruptcy discharge or foreclosure. The full definition of adverse credit is outlined here.

The last requirement makes parent PLUS loans unique among federal student loans, most of which have no credit requirements.

Parents who don’t meet these credit requirements should still apply for parent PLUS loans, as getting denied may actually help your college student. Federal student loan limits are set higher for undergraduate students whose parents are denied PLUS loans, so your child could access more federal student loans.

3. Figure out how much you can borrow

You’ll need to indicate a loan amount on the parent PLUS application. However, how much you can borrow with parent PLUS loans will depend on the specific cost of attendance (COA) at your child’s college:

  • Each college determines its own cost of attendance, and the COA is used to set the federal loan limits on parent PLUS loans.
  • You can borrow a parent PLUS loan amount only up to the remaining cost of attendance after all other financial aid (including your child’s student loan funds) has been applied.

It can help to get in touch with your child’s college. Its financial aid office can more accurately determine your eligibility and any limits on parent PLUS loans.

Additionally, the process to complete a parent PLUS loan application varies from school to school, according to Federal Student Aid. Ask the financial aid office how the college handles and processes parent PLUS loan applications.

4. Decide on a final loan amount

Although you can borrow up to the parent PLUS loan limit, that doesn’t mean you should. The parent PLUS limit is set according to your child’s costs, not your financial situation, so borrowing up to the full amount could result in student loan payments you can’t afford.

So, how much should you borrow?

It’s best to go for the least amount possible through parent PLUS loans while still covering your child’s college costs. Calculate your child’s education costs, from tuition to room and board. At the same time, project your monthly parent PLUS loan payments to ensure that you will be able to keep up with the amount you’ll need to borrow.

And make sure you’re maximizing all other financial aid opportunities first, as they might be more cost-effective than parent PLUS loans.

For instance, discuss having your child borrow the maximum amount of unsubsidized loans first. You can help out with repayment on these loans, and they have much lower costs than parent PLUS loans:

  • Interest rate: 5.05% on direct undergraduate loans disbursed on or after 7/1/18 and before 7/1/19 vs. 7.08% on parent PLUS loans
  • Loan fee: 1.062% on direct undergraduate loans vs. 4.236% on parent PLUS loans

You can use this handy tool from FinAid.org to estimate how much you might need to borrow to cover your child’s college costs.

5. Complete a parent PLUS loan application

Once you know how much you want to borrow, you can start a parent PLUS loan application. Many colleges will request that you apply for a parent PLUS loan through StudentLoan.gov. However, as the application notes, “some schools may have a different process for obtaining the additional information needed to process your direct PLUS loan application.”

Provide loan and identification details

The parent PLUS loan application on StudentLoan.gov is actually a “request for supplemental information,” which you can preview here. You’ll need to have your FSA ID (not your child’s) on hand to file and submit this form.

The information you’ll have to provide includes:

  • Loan details: the type of loan you need (parent PLUS in this case), along with your requested loan amount and period
  • Academic information: the code and address of your child’s college and the award school year
  • Student information: your child’s name, Social Security number, date of birth, permanent address and telephone number
  • Borrower information: your name, Social Security number, date of birth, citizenship status, permanent and mailing addresses, phone number and email address
  • Employment information: your employer’s name and address

Choose your deferment and disbursement preferences

You also will choose between a few parent PLUS loan options on the application:

  • Whether to defer parent PLUS loan repayment: Unlike your child’s federal student loans, parent PLUS loans aren’t automatically deferred while your child is enrolled in college and for the six-month grace period afterward. You can decide if you wish to begin repayment immediately or defer until after your child graduates or otherwise leaves school.
  • How the school can apply parent PLUS loan funds: Like other student loans, parent PLUS loans are disbursed to the student’s financial aid office and applied first to tuition, fees and room and board. You also might choose to authorize the school to use these loan funds to settle other outstanding charges like library fines or campus parking tickets.
  • Where the college should send leftover parent PLUS funds: Any amount remaining after educational costs are paid is called a credit balance. You can indicate on the parent PLUS loan application if you want this credit balance to be paid out to you or the student.

Submit the parent PLUS loan application

Once you’ve completed all fields, you can submit the application using your FSA ID. Doing so will trigger an immediate credit check to see if you have adverse credit.

If you don’t have credit issues, the application will pass to the financial aid office of your child’s college. The college aid office will process this document and determine your full eligibility for a parent PLUS loan.

If you do have adverse credit, you will be denied for a parent PLUS loan. But you can become eligible, according to the application documents, if you complete PLUS Credit Counseling and obtain an endorser or document explaining “extenuating circumstances to the satisfaction of the U.S. Department of Education.”

If you decide in the future to borrow more through parent PLUS loans, you will use this same form to request additional funds.

6. Sign a PLUS Master Promissory Note

After you submit your parent PLUS application, your child’s college financial aid office will process it, determine if you’re eligible and notify you upon approval (or denial). You also can contact the aid office at any point to check on the progress of your application.

If you’re approved, there’s a final step to complete the parent PLUS loan process: signing a PLUS Master Promissory Note (MPN). This legal document works as your loan agreement, fully outlining the terms of your repayment, including the loan period, interest rates and fees.

You can complete a PLUS MPN here. The process takes about 30 minutes, and the MPN must be completed in one sitting. You’ll need to provide much of the same identifying information you included in the application.

Additionally, you’ll need to supply two references on your MPN. They must be two different people who:

  • Live at two different U.S. addresses
  • Don’t live with you
  • Have known you for at least three years

For each reference, you’ll need to list a full name and contact information.

Once you submit the parent PLUS MPN, your student loans should be disbursed soon after it’s processed, per your directions on the initial application.

You will need to submit a new parent PLUS loan application to take out additional loans in the future, but you have to sign an MPN only once. “Most schools are authorized to make multiple federal student loans under one MPN for up to 10 years,” according to the Federal Student Aid office.

Learn about repayment and refinancing options

Make sure you’re keeping track of your parent PLUS loans as you go and that you’re aware of when the repayment will kick in. For many parents, learning how to apply for a parent PLUS loan isn’t the hard part — repaying it is. It’s smart to explore your repayment options for parent PLUS loans now so you can quickly adjust if you find yourself struggling with payments.

Along with exploring your repayment options, look into refinancing your parent PLUS loans to possibly qualify for lower interest rates. Refinancing is also an option if you want to transfer parent PLUS loans into your child’s name.

Rebecca Safier and Elyssa Kirkham contributed to this article.

Need a student loan?

Here are our top student loan lenders of 2020!
LenderVariable APREligibility 
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.

1 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

2 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

1Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

2This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 5/18/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.


3 Important Disclosures for Ascent.

Ascent Disclosures

Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.

  1. Variable rate loans are based on a margin between 2.90% and 16.50% plus the 1-Month London Interbank Offered Rate (LIBOR) rounded to the nearest 1/100th of a percent. The current LIBOR is 0.667%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an Annual Percentage (APR) range between 3.18% and 13.92%. Fixed rate loans have an APR range between 4.00% and 14.92% based on your credit worthiness and your selected program. Competitive variable rates calculated monthly at the time of loan approval. Rates are effective as of 05/01/2020 and reflect an Automatic Payment Discount of 0.25% on the lowest offered rate and a 2.00% discount on the highest offered rate. Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. (See Automatic Payment Discount Terms & Conditions.)
  2. Payments may be deferred. Subject to lender discretion, forbearance and/or deferment options may be available for borrowers who are encountering financial distress.
  3. Making interest only or partial interest payments while in school will not reduce the principal balance of the loan. There are three (3) flexible in-school repayment options that include fully deferred, interest only and $25 minimum repayment.
  4. Flexible repayment plans may be offered up to a fifteen (15) year repayment term for a variable rate loan and ten (10) year repayment term for a fixed rate loan. Students must be enrolled at least half-time at an eligible school. Minimum loan amount is $2,000.
  5. Interest rate reduction of 0.25% for enrollment in automatic debit applies only when the borrower and/or cosigner signs up for automatic payments and the regularly scheduled, current amount due (including full, flat, or interest only payments, as applicable) is successfully deducted from the designated bank account each month. Interest rate reduction(s) will not apply during periods when no payment is due, including periods of In-School, Deferment, Grace or Forbearance. If you have two (2) returned payments for Nonsufficient Funds, we may cancel your automatic debit enrollment and you will lose the 0.25% interest rate reduction. You will then need to re-qualify and re-enroll in automatic debit payments to receive the 0.25% interest rate reduction.
  6. All applicants (individual and cosigner) are required to complete a brief online financial literacy course as part of the application process to be eligible for funding.
  7. Eligibility, loan amount and other loan terms are dependent on several factors, which may include: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Aggregate loan limits may apply. The cost of attendance is determined and certified by the educational institution.
  8. The legal age for entering into contracts is eighteen (18) years of age in every state except Alabama where it is nineteen (19) years old, Nebraska where it is nineteen (19) years old (only for wards of the state), and Mississippi and Puerto Rico where it is twenty-one (21) years old.
  9. 1% Cash Back Graduation Reward subject to terms and conditions. Click here for details. In order to be eligible for the 1% Cash Back Graduation Reward, borrower must meet the following criteria after graduation:
    • The student borrower has graduated from the degree program that the loan was used to fund.
    • The student borrower may change majors and/or transfer to a different school, but must obtain the same level of degree (e.g. – undergraduate or graduate)
    • The graduation date is more than 90 days and less than five (5) years after the date of the loan’s first disbursement.
    • Any loan that the student has borrowed under the Ascent loan is not more than 30-days delinquent or in a default status as of the graduation date and until any Graduation Reward is paid.
  10. Students can apply to release their cosigner and continue with the loan in only their name after making the first 24 consecutive regularly scheduled full principal and interest payments on-time and meeting the other eligibility criteria to qualify for the loan without a cosigner.

* Application times vary depending on the applicant’s ability to supply the necessary information for submission.


4 Important Disclosures for Discover.

Discover Disclosures

  1. Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
  2. View Auto Reward Debit Reward Terms and Conditions at DiscoverStudentLoans.com/AutoDebitReward.
  3. Aggregate loan limits apply.
  4. Lowest APRs shown are available for the most creditworthy applicants and include an interest-only repayment discount and Auto Debit Reward. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including undergraduate and graduate loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 1.00% as of April 1, 2020. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.
  5. Get a variable interest rate from 2.99% APR to 6.24% APR (3-Month LIBOR + 1.99% to 3-Month LIBOR + 5.24%) for either a 10-year or 20-year repayment term. Or lock in a fixed interest rate from 3.74% APR to 6.49% APR for a 10-year repayment term or from 3.74% APR to 6.49% APR for a 20-year repayment term. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 1.00% as of April 1, 2020. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

5 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).

  1.  Rates are as of July 1, 2019 and include auto-pay discount. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment. Variable rates may increase after consummation.

6 Important Disclosures for Citizens.

Citizens Disclosures

Undergraduate Rate Disclosure: Variable interest rates range from 3.54%- 6.40% (3.54% – 6.40% APR). Fixed interest rates range from 3.79% – 6.65% (3.79% – 6.65% APR).

Graduate Rate Disclosure: Variable interest rates range from 2.72% – 6.11% (2.72% – 6.11% APR). Fixed interest rates range from 3.49% – 6.36% (3.49%-6.36% APR).

Business/Law Rate Disclosure: Variable interest rates range from 1.47% – 8.35% (1.47% – 8.20% APR). Fixed interest rates range from 4.45% – 10.74% (4.45% – 10.59% APR).

Medical/Dental Rate Disclosure: Variable interest rates range from 1.47% – 7.25% (1.47% – 7.10% APR). Fixed interest rates range from 4.40% – 9.64% (4.40% – 9.49% APR).

Parent Loan Rate Disclosure:  Variable interest rates range from 3.09%-6.23% (3.09%-6.23% APR). Fixed interest rates range from 5.48%-8.52% (5.48%-8.52% APR).

Bar Study Rate Disclosure:  Variable interest rates range from 4.79% – 9.93% (4.79% – 9.85% APR). Fixed interest rates range from 7.39% – 12.94% (7.39% – 12.82% APR).

Medical Residency Rate Disclosure:  Variable interest rates range from 3.88% – 7.38% (3.88% – 7.04% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).

Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of May 1, 2020, the one-month LIBOR rate is 0.44%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.

Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.

Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.

Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.

Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.

Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.

1.25% – 9.44%*,1Undergraduate and Graduate

Visit SallieMae

1.49%
11.98%
2
Undergraduate, Graduate, and Parents

Visit College Ave

3.18% – 13.92%3Undergraduate and Graduate

Visit Ascent

1.49%
11.99%
4
Undergraduate and Graduate

Visit Discover

3.52% – 9.50%5Undergraduate and Graduate

Visit CommonBond

3.54% – 6.40%6Undergraduate and Graduate

VISIT CITIZENS

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.