What Is A Plus Loan – Application Requirements For Parents & Graduates

PLUS loans are a type of loan for postsecondary educational purposes. Offered by the U.S. Department of Education, these loans provide an opportunity for parents and graduate students to borrow money from the federal government in order to pay for education-related expenses. This article will explore the details of PLUS loans and examine the application requirements that must be met in order to qualify.

The first part of this article will focus on providing basic information about PLUS loans. It will discuss what kinds of costs can be covered with such a loan, who is eligible to receive one, how much money may be borrowed, and other important facts related to this kind of loan. The second section will delve into more specific detail regarding the application process, including eligibility criteria and required documents that must be provided when applying for a PLUS loan. Finally, an evaluation of whether or not a PLUS loan is right for you and your individual circumstances will conclude the article.

In conclusion, this article aims to provide readers with a comprehensive overview of PLUS loans – their benefits and risks – so they can make an informed decision about whether or not it’s best suited for them financially speaking. Given its potential impact on finances both now and in the future, understanding all aspects of PLUS loans is essential before making any final decisions related to them.


Definition Of Plus Loan

A PLUS Loan is a type of federal student loan that allows parents and graduate students to borrow the amount needed for college expenses. It is offered by the US Department of Education under the William D. Ford Federal Direct Loan Program. The funds from this loan can be used to cover educational costs such as tuition, fees, room and board, books, supplies, transportation and other related expenses.

The eligibility criteria for these loans include being a US citizen or eligible non-citizen; having no adverse credit history; filing a Free Application for Federal Student Aid (FAFSA); and being enrolled at least half time in an eligible degree program. In addition, parent borrowers must meet certain additional requirements including passing a credit check before they are approved for the loan.


Eligibility Criteria

For parents and graduate students to be eligible for a PLUS loan, they must meet certain requirements. First, the applicant must not have an adverse credit history. This means that if the parent or student has defaulted on any federal student loans in the past, or had any other types of delinquencies on their credit report reported within 5 years prior to application, it may disqualify them from receiving the loan.

Additionally, applicants are required to pass a Master Promissory Note (MPN), which is a legal document outlining the borrower’s repayment obligations. The MPN also serves as an agreement between the borrower and lender stating that all terms and conditions of the loan will be met by both parties. Lastly, some institutions may require additional documentation such as income verification documents or tax returns depending on individual circumstances.


Application Process

A PLUS loan is a type of federal student aid, available to parents and graduate students. To apply for a PLUS loan, applicants must meet certain requirements.

These application requirements include:

  •  Completing the Free Application for Federal Student Aid (FAFSA)
  • Having an acceptable credit history
  • Being a U.S. citizen or eligible non-citizen
  • Demonstrating financial need, if required by school policy
  • Meeting other eligibility criteria as set forth by the Department of Education

When all requirements are met, borrowers can begin the actual application process with their chosen lender. The first step in this process is to complete and sign a Master Promissory Note (MPN). This legally binding document outlines terms between borrower and lender such as interest rate and repayment plan. Once completed, it needs to be returned to the lender along with required documents such as tax returns or proof of income. After review by the lender, funds will be dispersed directly to the university or college that is attended by the dependent student on behalf of whom the loan was requested.


Credit Check Requirements

A PLUS loan is a federal student loan available to both parents of dependent undergraduate students and graduate/professional degree students. To be eligible for the program, applicants must demonstrate an acceptable credit history when they apply. The credit check process is designed to ensure that only those who can manage their current financial obligations responsibly are approved for the loan.

The U.S Department of Education uses Experian as its designated national consumer reporting agency (CRA) to conduct these credit checks. A review of all three major nationwide CRAs (Experian, Equifax, TransUnion) may also occur if necessary or requested by the school’s Financial Aid Office. During this process, certain information from any previously reported delinquent loans or defaulted debts may be considered in determining whether you meet the eligibility requirements for a PLUS loan.


Interest Rates And Fees

The PLUS Loan is a federal loan offered to parents and graduate students. The interest rate for the PLUS Loan is fixed at 7.08%, with an additional 4.248% origination fee charged by the Department of Education for each new loan disbursement. Borrowers may apply for deferment and forbearance, but are subject to accruing interest during these periods.

Repayment terms begin within 60 days after full disbursement of funds and can extend up to 10 years depending on the amount borrowed. Partial pre-payment without penalty is permitted once a year; however, borrowers should be aware that some lenders will charge fees if payments exceed certain amounts or frequencies. It is important to note that all PLUS Loans carry an Unsubsidized status regardless of borrower income level, meaning they must pay both principal and interest while enrolled in school or during any other period when repayment is deferred.


Repayment Options

Repayment of a PLUS Loan begins within 60 days after the loan is fully disbursed. Parents may choose to defer repayment while their student is enrolled at least half-time and for an additional six months after the student drops below half-time enrollment. Borrowers can select from several repayment plan options, including Standard Repayment, Extended Repayment, Graduated Repayment, Income Contingent Repayment (ICR), and Consolidation Loans.

Standard repayment allows borrowers to pay off their loans in 10 years or less with fixed monthly payments. Under extended repayment, interest rates are generally higher but loan terms can extend up to 25 years depending on the amount owed. Graduated payment plans offer lower initial monthly payments that gradually increase over time as earnings rise. ICR plans allow parents to qualify for lower monthly payments based on income and family size without having to request a change in payment schedule every year; however, this option also results in paying more interest over time than other available options. Finally, consolidation loans combine multiple federal loans into one single loan with an extended term and potentially reduced monthly payments.



A PLUS Loan is an attractive option for parents and graduates looking to pay for college expenses. To be eligible, applicants must meet certain criteria such as having good credit history and not being in default on any federal student loans. The application process requires the submission of several documents including proof of income and tax returns. A credit check will also need to be completed prior to approval. Interest rates are subject to change annually but fees may remain stable over time. Repayment options include deferral or forbearance if necessary, allowing borrowers flexibility when it comes to their payment obligations. For those who can qualify, a PLUS Loan provides an excellent opportunity to finance educational costs without risking personal assets or taking out private loans with higher interest rates.

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