Office of
Financial Aid

What are Federal Direct Parent PLUS Loans?

The Federal Direct Parent PLUS loan is taken out by the parent for their son or daughter to help pay for their education over an extended period of time.  The Federal Direct Parent PLUS Loan is funded directly by the federal government under the William D Ford Federal Direct Loan Program.  Interest rate on the Federal Direct Parent PLUS Loan program is a fixed 7.9%.  There are no annual borrowing limits set by the federal government, but eligibility is limited to the student's cost of attendance minus any financial aid received during the loan period, with application being made for each academic year the parents wish to borrow. To find out your maximum eligibility for the PLUS Loan, please call the financial aid office at 253-535-7134.

What are the requirements?

As a parent borrower, you must be:

  • A student's natural or adoptive mother or father
  • An eligible step-parent, if income and assets are considered in the Expected Family Contribution (EFC)
  • Borrowing on behalf of a dependent undergraduate student
  • Either a U.S. citizen, U.S. national or eligible non citizen
  • Not in default on any education loan or owing a refund on any education grant
  • Not on record with an adverse credit history as defined by the Department of Education

Your dependent student must be:

  • A U.S. citizen, U.S. national or eligible non citizen
  • Enrolled or accepted for enrollment at least half-time in a degree or certificate program at an eligible school
  • Not in default on any student loan or owe a refund to any education grant program

What are the loan fees?

The Federal Direct PLUS Loans have a 4% origination fee assessed against the amount borrowed.  Two and one  half percent (2.5%) is deducted from the loan prior to its disbursement onto the student account.  The remaining 1.5% fee is a rebate to the borrower, but will be added to the loan balance during loan repayment if the borrower fails to make the first 12 monthly payments on time. Please note change for 2012-13: The loan rebate will be eliminated, which means the full 4% origination fee will be deducted from your loan proceeds prior to its disbursement.

How do my parents apply?   

Parents wishing to borrow a Federal Direct Parent PLUS loan should apply directly with the U.S. Department of Education.  Once your credit history is found to be acceptable and you complete the Master Promissory Note (MPN), the U.S. Department of Education will notify PLU of your approval.  PLU will then change your Federal Direct Parent PLUS loan status on Banner to "cert" (certified), modify your loan amount to your requested loan amount or your maximum eligibility, whichever is less, and disburse the loan proceeds onto the student's account when they are received from the federal government.

Please note:  Because this is a credit based loan, a credit check is made at the time of your application.  To avoid multiple credits inquiries on your credit record, do not apply before March 1.

How much can my parents borrow?

The amount that you can borrow is equal to your cost of attendance minus any other financial aid you receive. For example, if your cost of attendance is $35,000 dollars and you receive $28,000 in other financial aid, your parents could borrow up to—but no more than—$7,000.