General Information About Direct PLUS Loans
The parents of a dependent student may borrow funds from the U.S. Federal Direct Parent PLUS Loan Program to finance some or all of the cost of their child’s education. The maximum loan amount is the difference between the cost of attendance and the total amount of financial aid and scholarships awarded to the student.
The interest rate is determined at the end of May for new loans that will be borrowed in the coming school year. (Rates are based on the final 10-year Treasury Note auction in May plus 4.60%.) Rates are fixed for the life of the loan. The 2021-22 interest rate is 6.28% and there is an origination fee of 4.228%.
Eligibility requirements for parents include: (1) Borrower is a natural or adoptive parent of a dependent student. A stepparent is also eligible to borrow a Direct PLUS Loan if his/her income and assets were required on the student’s FAFSA. (2) Borrower is a U.S. citizen, permanent resident, or eligible non-citizen. (3) Borrower does not have an adverse credit history. (Learn more about Direct PLUS Loan Program.)
How to Apply for a Direct PLUS Loan
Step One: File a FAFSA
If your child hasn’t done so already, he/she must complete a Free Application for Federal Student Aid (FAFSA) before you (the parent) can apply for a Federal Direct PLUS Loan.
Step Two: Complete the PLUS Request Process On-line
Log into the Federal Student Aid website, and click on "APPLY FOR AID / Apply for a Parent PLUS Loan." Click "Start." Fill in and submit the necessary information.
You will be asked to specify whether you want to borrow the maximum Direct PLUS Loan amount for which you are eligible or a specific amount. If you choose a specific amount, bear in mind that a 4.228% origination fee will be retained by the lender. So if you request $10,000, you will actually receive 95.772% of that amount, or $9,577.20.
This step is repeated each year so that you can request a specific loan amount and consent to have a current credit check performed.
After the parent completes the PLUS Request, the Department of Education will perform a credit review. You will be told immediately whether your request is approved or denied.
If your PLUS Loan is denied, the student becomes eligible to borrow additional unsubsidized Direct Student Loan funds on top of his/her normal Direct Loan limits: $4,000 more for students in the first two years of undergraduate study and $5,000 more for students in subsequent years. The student should contact the Financial Aid Office if he/she wishes to borrow this additional amount.
If your PLUS Loan is approved, go on to step three.
Step Three: Complete the Federal Direct Parent PLUS Master Promissory Note (MPN) On-line
While still logged in on the Federal Student Aid website, click on "COMPLETE AID PROCESS / Parent PLUS MPN" (Master Promissory Note), then click "Start." Fill in and submit the necessary information. An electronic notification of your completion will be sent to the Financial Aid Office. The MPN must be completed only once during the student’s time at Thomas Aquinas College.
Step Four: The Financial Aid Office contacts the Parent
When the Financial Aid Office receives notification that you have completed steps two and three, we will contact you to confirm the amount you wish to borrow. Once the amount is confirmed, we will send a revised Financial Aid Award Letter (that includes the PLUS Loan) to the student, together with a Parent PLUS Loan Confirmation Form.
Step Five: Sign and return the updated Financial Aid Award Letter and PLUS Loan Confirmation Form
The student must sign the revised Financial Aid Award Letter and the parent must sign the Parent PLUS Loan Confirmation Form. Return them to the Financial Aid Office by the deadline.
Step Six: The Financial Aid Office Processes the PLUS Loan
The Financial Aid Office will begin processing your PLUS Loan, and the Business Office will apply the funds to any outstanding charges owed to the College for the current academic year. Any remainder will be given to the parent or student according to the directions provided by the parent on the Parent PLUS Loan Confirmation Form.
After the Financial Aid Office has processed the loan, you will be able to track your PLUS Loan information through your dashboard on https://studentaid.gov/.
Questions? Contact the Financial Aid Office.