This is a loan borrowed by the parent on behalf of the student. The parent is the borrower and is solely responsible for repaying the loan. The loan repayment obligations cannot be transferred to the student. The student has no obligation, legal or otherwise, to repay the loan.
Not Required to Borrow
You are not required to borrow a Federal Direct Parent PLUS loan, and/or you may borrow less than the amount offered. You can also decide to cancel a loan and have funds returned to the lender. You will be required to repay any student account balance when a disbursed Federal Direct Parent PLUS loan is canceled.
Deadline to Accept Federal Direct Parent PLUS Loans
Parents must accept the Federal Direct Parent PLUS Loan before the end of the academic term. For example, sometimes students decide to attend in the fall but do not return in the spring term. In this case, the student would only be eligible for the fall portion of the loan (half of the requested amount), and the parent would need to accept the Federal Direct Parent PLUS Loan before the end of the fall term.
Parents Must Have Guest Access
Your student needs to assign Guest Access to the parent(s) who will apply for the Federal Direct Parent PLUS Loan. For financial aid purposes, the parent(s) must be given the following level of access in the Financial Info section: View All, Make Payments, Parent PLUS Loan. For instructions, click here.
Loan Rates and Discounts
Revised July 1, of each year by the U.S. Department of Education
New rates and fees for loans first disbursed between July 1, 2015 and June 30, 2016:
- 6.84%* fixed** Federal Direct Parent PLUS loan interest rate
- 10.5% lifetime interest rate cap (Parent PLUS)
- 4.272%* Origination Fee (May be revised October 1st each year without notice)
- 0.25% Interest rate discount for automatic debit (may be revised without notice at the discretion of the U.S. Secretary of Education)
- Loans are serviced by agencies contracted by the U.S. Department of Education.
*For the most up-to-date information on rates and discounts, visit the US Department of Education.
**Federal Direct Student Loans are currently fixed interest rate loans. The new annual interest rates apply only to new loans first disbursed on or after July 1, 2015; prior loans are not affected by a change in the interest rate or origination fee.
The Federal Direct Parent PLUS loan decision should be made based on the total years of the student’s academic career. For example: If you borrow $10,000 the first year, and the student's program is four years in length, you would need to borrow a total of $40,000 for the next four years. Use the Repayment Estimator to estimate your federal student loan payments under each repayment plan.
Federal Direct Parent PLUS Loan Eligibility
Parents/Students Must File a New Free Application for Federal Student Aid (FAFSA)
Families must file the FAFSA to be awarded any federal student loan, including a Federal Direct Parent PLUS Loan. We recommend that you file the FAFSA before March 1st of each year. Your student must be offered a Federal Direct Parent PLUS Loan to complete the application process.
Satisfactory Academic Progress Standards
Student must meet Satisfactory Academic Progress standards to maintain eligibility for financial aid (including the Federal Direct Parent PLUS Loan).
Legal Name and Social Security Number (SSN) Required
Parents and students must use their legal name and SSN as they appear on their social security card for all loan documents. This information must also match your Federal FSA ID and FAFSA; nicknames or initials cannot be used. Doing so will cause your Federal Direct Parent PLUS loan application to be rejected by the lender and/or credit agencies, which will cause long delays in the processing of your request and the disbursement of funds.
Federal regulations require that a Federal Direct Parent PLUS Loan be borrowed by either a biological parent or an adoptive parent. Any step-parent can also borrow the Federal Direct Parent PLUS loan for their student as long as the step-parent is listed on the FAFSA with one of the two biological or adoptive parents.
Parents who are eligible non-citizens will be required to submit copies of their immigration documentation. Instructions for completing this process will be emailed to the student.
Schools Determine Eligibility
Congress has given colleges and universities the sole responsibility for determining your eligibility for the Federal Direct Parent PLUS loan. We are also responsible for continuously monitoring your eligibility during the academic year.
Students may lose eligibility for the Federal Direct Parent PLUS loan funds if they:
- fail to maintain satisfactory academic progress
- drop below minimum units
- fail to submit documents before the certification deadlines
- receive additional aid over the cost of attendance
Your consent is not required if UA has to cancel or reduce your loans to remain in compliance with Federal regulations.
Credit Approval and Denial
Approval of the Federal Direct Parent PLUS loan is subject to a credit check by your lender, the U.S. Department of Education (ED). This loan is also subject to an origination fee at disbursement. Credit status is only good for 180 days, after which time a new credit check will be required. This is one reason why we recommend that families request the anticipated amount needed for the full academic year in one loan.
The Federal Direct Parent PLUS Loan will only be denied for adverse credit reasons. If you do not have adverse credit, you will be approved. ED defines these conditions as reasons for adverse credit:
- Bankruptcy (Chapters 7, 11, or 12 within the past 5 years)
Note: Department Policy does not consider Chapter 13 bankruptcy adverse.
- Voluntary surrender within the last 5 years
- Repossession within the last 5 years
- Foreclosure proceedings started
- Foreclosure within the last 5 years
- Deed in lieu of foreclosure
- Accounts currently 90 days or more delinquent
Note: Accounts currently reported as 90 days or more delinquent, which are over 5 years old since the last reported delinquency, are not considered adverse.
- Wage garnishment within the last 5 years
- Defaulted loan that has been claim paid
- Lease or contract on secured real estate
- County/State/Federal tax lien, within the past 5 years
Parent(s) with adverse credit will be denied. See Protect your credit for adverse credit Information.
For additional information about adverse credit, click here.
Determine Your Credit Eligibility
Families who are uncertain of their ability to borrow this credit-based loan are encouraged to determine their creditworthiness by using the credit check tool at studentloans.gov. After the parent has logged in, click “Request PLUS Loan” and complete the entire process to generate the credit check.*
*UA will not receive confirmation from this credit check until the parent completes the steps here to apply for the Federal Direct Parent PLUS loan.
If Denied for Adverse Credit
You must complete PLUS Counseling at studentloans.gov if you decide to seek an endorser or file for an appeal of the credit decision. If you are denied for a subsequent PLUS Loan after 180 days (approximately 6 months) from the initial denial, a new PLUS Counseling session will be required.
- You may appeal the adverse credit decision with the Direct Loan Applicant Service Center at 1.800.557.7394.
- You may obtain a credit worthy endorser. Be aware that if your loan request is denied, it will most likely continue to be denied in the future. You should be prepared to secure an endorser this year who can assist you in future years as well.
Loan reference numbers for 2015-2016 Federal Direct Parent PLUS Loans will be sent beginning July 15, 2015.
- Instead of getting an endorser, your student may request an additional Federal Direct Unsubsidized loan:
• Additional Unsubsidized loan amount limit for a Freshmen and Sophomores is $4,000
• Additional Unsubsidized loan amount limit for a Juniors and Seniors is $5,000
To request that an additional Federal Direct Parent PLUS Loan be offered to your student, you must contact our office at firstname.lastname@example.org or 520.621.1858. If two different parents intend to borrow Federal Direct Parent PLUS loans for the student:
- Contact our office and request that your student is offered two separate Federal Direct Parent PLUS loans (one for each parent)
- Your student must provide each parent with separate Guest Access.
Requesting Cancelation of Your Federal Direct Parent PLUS Loan
A written request (fax, email) is required to reduce or cancel a Federal Direct Parent PLUS Loan. Administrative cancelation of your loan may be completed without your consent due to federal regulations. Regardless of the type of cancelation, any account balance created as a result of the reduction or cancellation of a disbursed loan must be repaid by the student immediately.