A Parent PLUS Loan is a federal loan available to parents who want to help dependent undergraduate children cover college costs. PLUS Loans have a fixed interest rate set by the government and come with an origination fee.
Parents can qualify for a PLUS Loan if their child is enrolled at least half time in an eligible school. Parents also have to submit to a credit check. Qualifying parents can borrow up to the cost of tuition minus other sources of financial aid. But students should exhaust other sources of aid first, such as Direct Loans.
A PLUS Loan is one of several borrowing options available to parents. Parents of college students can sink hours or even days into navigating educational costs. From applying for student aid to figuring out a college budget and comparing financing options, the process can be time-consuming.
But the cost isn’t just time; it’s also money. On average, parents borrow around $40,000 to help their children afford an education.
If your research into loan options leads you to Parent PLUS Loans, this guide can help you find out what’s next. We’ll walk you through the Parent PLUS Loan application process one step at a time.
How to apply for a Parent PLUS loan in 6 steps
Applying for a Parent PLUS loan can be a confusing process. But by following the steps below for your Parent PLUS application, you’ll have a clear path for obtaining the parent student loans you need.
Here’s where to start — along with the steps that come next and all the details you need to know in between.
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 — getting denied can 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 a guide from the Federal Student Aid Office. 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, at the amount you’ll need to borrow, you will be able to keep up.
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: 4.45% on Direct undergraduate loans vs. 7.00% on Parent PLUS loans
- Loan fee: 1.069 percent on Direct undergraduate loans vs. 4.276 percent 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 complete 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 might be able to become eligible, according to the application documents, if you complete PLUS Credit Counseling and obtain an endorser or document “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 FSA Office.
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, applying 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.
Elyssa Kirkham contributed to this article.
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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.
(1)All rates shown include the auto-pay 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.
(2)This 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.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 11/4/2019. Variable interest rates may increase after consummation.
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Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
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Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
5 Important Disclosures for Citizens.
Undergraduate Rate Disclosure: Variable rate, 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 February 1, 2020,the one-month LIBOR rate is 1.66%. Variable interest rates range from 4.22% – 7.81% (4.22% – 7.81% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.36% – 7.95% (4.36% – 7.95% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown for eligible, creditworthy applicants with an undergraduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discount of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
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 with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, 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 and replace those with the benefits of the Education Refinance Loan. 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 at http://www.citizensbank.com/EdRefinance,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.
Citizens Bank Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers 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 anytime. Interest rate ranges subject to change. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, 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.
|2.84% – 10.97%1||Undergraduate, Graduate, and Parents|
|2.75% – 10.65%*,2||Undergraduate and Graduate|
|2.80% – 11.37%3||Undergraduate and Graduate|
|3.52% – 9.50%4||Undergraduate and Graduate|
|4.22% – 7.81%5||Undergraduate and Graduate|