The U.S. Department of Education makes Direct PLUS Loans to eligible parents of dependent students. Unlike the Direct Subsidized and Unsubsidized Loans borrowed by students, the Parent PLUS Loan requires a credit check that is valid for 180 days.
How to Apply
To apply for a Federal Direct PLUS Loan, you must:
- Determine the PLUS loan eligibility amount which is shown on the Financial Aid Award Letter. Parents will need to check availability with their student.
- Visit Studentaid.gov and log in with the "parent" FSA ID. Make sure to not log in as the student.
- Proceed to “Apply for a PLUS Loan”. Two important things to know is the amount you wish to borrow and the method of disbursement (see options below).
- Complete a Parent PLUS Master Promissory Note
If approved, our office will receive an electronic update of your completed loan application. Generally, we receive this information within 5-7 business days.
The parent is notified immediately after applying whether they are approved or denied. If the credit check leads to a denial, parents have the following options:
- Appeal: Log into Studentaid.gov and select “Document Extenuating Circumstances” and follow the instructions.
- Endorse: Obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you cannot repay it. Have the endorser create an FSA ID, and then log into Studentaid.gov and select “Endorse a PLUS Loan”. If the loan was endorsed or you completed a successful credit appeal, complete the PLUS Counseling through Studentaid.gov.
- Request Additional Unsubsidized Student Loan: Have your student apply for additional Loan funds instead of acting on the parent PLUS loan. Download and submit the Request for Additional Unsubsidized Loan form found in the Forms tab of our website.
With either option 1 or 2, you also must complete “PLUS Counseling” on StudentAid.gov
Interest Rate and Origination Fee
The interest rate depends on when the loan was first disbursed. Visit the Federal Student Aid website for information about current and past interest rates. Interest rates are determined each spring for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan has a fixed interest rate for the life of the loan.
The Department of Education charges an "Origination fee" on all Direct PLUS Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. See the Federal Student Aid website for the current loan fee percentages.
While applying for the loan, parents will be given two disbursement options. In order to receive your funds in a timely manner, we strongly encourage you to select the “student” disbursement option. If you chose “me”, the borrower and would like to change the disbursement method to “student”, you can complete our Parent PLUS Loan Adjustment Form found on the Forms tab of our website. The two different disbursement options are:
- STUDENT (highly recommended): If you indicated on the application that you want the money to go to “the student", then the PLUS funds will credit to the student's BARC account. Those funds first pay any university fees and the remaining amount is then "refunded" to the student. The earliest these funds will be released to the student is 10 days before the start of the quarter.
- BORROWER: If you chose the "me" (the parent borrower), one of the following options will occur:
- If the loan’s quarterly amount is less than your student’s BARC balance at the time of disbursement, the loan may be paid to the student’s BARC account.
- If the loan’s quarterly amount is more than the BARC balance, UCSB will send the entire loan amount to you, the parent borrower, via paper check in the mail. These checks are not mailed until after the quarterly fee payment deadline with the BARC Office. Please ensure that your student’s BARC account is paid or deferred prior to the payment deadline.
Repayment begins 60 days after the final disbursement of the loan. During the application process, a parent can also choose to defer repayment until 6 months after the student graduates or leaves school.
Information about your loans is submitted to the National Student Loan Data System (NSLDS), which is the database where you may view your entire federal loan history. Please visit StudentAid.gov view your borrowed loan amounts, disbursement dates, and who your federal loan servicer is as well as their contact information. The federal loan servicer is assigned by the Department of Education, and they handle matters related to billing and repayment of your loans. If you have questions about changing your repayment plan, loan consolidation or if you qualify for loan forgiveness please talk to your servicer.
We suggest you utilize Federal Student Aid’s Repayment Estimator to see approximately how much a month you will owe.