The Federal Direct PLUS Loan
This is an education loan for parents of undergraduate students. The parent is the sole borrower, not the student. The Direct PLUS Loan has a fixed interest rate of 7.54% for loans disbursed on or after July 1, 2022. There is also a 4.228% origination (upfront) fee that is deducted by the government from each loan disbursement. The origination fee may be included in the amount borrowed. To determine the gross amount to borrow, including the fee, divide the amount you need to cover your costs for the year by .9577.
The student must file the FAFSA in order for the parent to borrow the PLUS Loan.
Application Instructions for Parent PLUS Loan Borrowers (including transfer students)
The 2022-2023 application will be available at studentaid.gov on April 15, 2022. Do not apply prior to receiving your financial aid offer to be sure of the amount you need to borrow. In addition, the credit history check will expire 180 days after completing the application. The Financial Aid Office will not begin processing PLUS Loans until July 2022.
To apply, the parent borrower should:
Complete the application online at studentaid.gov. Click LOG IN located in the top right (the parent borrower will need to use his/her FSA ID and password - the same one used to electronically sign the FAFSA), select the Apply for Aid tab, and then apply for a Parent PLUS Loan. Only first-time borrowers need to complete the Master Promissory Note (MPN). While you have the option to select the maximum for the amount, we encourage you to calculate the amount you need. Please contact the Financial Aid Office for assistance in calculating the amount you need to borrow.
*PLEASE NOTE: You must complete the aid application process before you will receive a financial aid offer. Please let our office know if you do not plan to file the FAFSA, email@example.com.
Advantages of the Direct PLUS Loan include:
- Qualifications are based solely on the parent's credit history and there are no debt-to-income ratio or employment verification requirements.
- Flexible repayment terms with up to 10 years to repay the loan. Parents may choose to defer payments until six months after the date the student ceases to be enrolled at least half time. Accruing interest may either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly. To request a deferment, the borrower must wait until after the first disbursement of the loan (8/24/22 for fall 2022 and 1/11/23 for spring 2023) and then contact the loan servicer for instructions. To determine the loan servicer and for a centralized view of federal loans, the borrower should go to studentaid.gov and log in using his/her FSA ID and password.
- Interest may be tax-deductible.
- No penalty for early repayment or payoff.
- The student is eligible to borrow additional Unsubsidized Direct Loan funds if the PLUS Loan is denied (more information below).
- Provides built-in insurance for death and disability that applies to both the borrower and the student at no additional cost.
If the parent is denied the PLUS Loan, you (the student) are eligible to borrow additional funds through the Unsubsidized Direct Loan program ($4,000 per year for freshmen and sophomores and $5,000 per year for juniors and seniors). This loan will automatically be added to your aid offer upon receipt of a PLUS Loan denial (automatically sent to the Financial Aid Office) and you will be notified by email to log in to AccessLVC to accept\reduce\decline this loan.
Federal Direct Graduate PLUS Loan
No Subsidized Loan Eligibility for Graduate and Professional Students
The Federal Direct Graduate PLUS is a federal loan for graduate students enrolled at a minimum of 4.5 credits per semester. You may only borrow this loan after you have borrowed your maximum eligibility through the Federal Direct Unsubsidized Loan. The Graduate PLUS Loan offers excellent repayment terms with a fixed interest rate of 7.54% for loans disbursed on or after July 1, 2022. There is also a 4.228% origination fee that is deducted by the government from each loan disbursement. The origination fee may be included in the amount borrowed. To determine the gross amount to borrow including the fee, divide the amount you need to cover your costs for the year by .9577.
Students who choose to borrow through the Graduate PLUS Loan should do so after reviewing the financial aid offer, which is available in early July. By waiting until the aid offer is available, you will know the total amount needed to cover annual expenses. The Financial Aid Office recommends applying for the full year rather than on a per-semester basis. By doing so, you will only have to complete the application (credit check) per academic year.
Interest on Graduate PLUS Loans begins accruing after the first disbursement. After the loan is fully disbursed, your federal loan servicer will automatically add an in-school deferment and a 6-month post-enrollment deferment. Interest is NOT capitalized until the end of the post-enrollment deferment period.
To apply, please go to studentaid.gov and log in using your FSA ID and password (the same one you used to sign the FAFSA). Click the Apply for Aid tab and then apply for the Graduate PLUS Loan. If you are a first-time graduate PLUS borrower, you must also complete the Master Promissory Note (MPN) and Entrance Counseling. The Financial Aid Office will be notified electronically.