How to apply for a Parent PLUS Loan

Parent PLUS Loans are federal student loans available to parents rather than students. Parents can borrow up to the total cost of attendance at their child’s school, minus any other financial aid the student has already received.

Follow these seven steps to apply for a Parent PLUS Loan, and learn about your options if your loan application is denied.

How to apply for a Parent PLUS Loan

Follow these seven steps to apply for a federal Parent PLUS Loan.

1. Complete the FAFSA and review your Student Aid Report

Your first step in getting a Parent PLUS Loan is to fill out the Free Application for Federal Student Aid (FAFSA) with your child.

Both you and your child must create a FAFSA ID online at StudentAid.gov, then follow the instructions to complete and sign the form.

The FAFSA is typically available starting Oct. 1 for the following school year, and you should fill out the FAFSA as soon as possible to ensure you get your application in before they run out of funds. The Department of Education will process your FAFSA and issue a Student Aid Report.

WHAT IS FAFSA?

2. Find out if you qualify for a Parent PLUS Loan

To get a Parent PLUS Loan, you have to meet the following eligibility requirements:

• You must be the biological, adoptive, or step-parent of a dependent undergraduate student.
• The student must be enrolled at least half-time in a degree or certificate program at a school that participates in the federal Direct Loan program.
• You must have a financial need.
• You must be a U.S. citizen or eligible noncitizen.
• You can’t be in default on any other federal student loans.

You also need to pass a credit check during the application process. This credit check doesn’t look at your credit score, so no minimum credit score is required to get a Parent PLUS Loan. However, the credit check looks for an "adverse credit history."

According to the U.S. Department of Education, an adverse credit history includes:

• Having one or more debts with a total outstanding balance greater than $2,085 that are 90 or more days delinquent or have been placed in collection or charged off during the last two years
• Having any of the following within the last five years: default determination, bankruptcy, foreclosure, repossession, tax lien, wage garnishment, write-off of a federal student aid debt

3. Figure out how much you can borrow

The maximum you can borrow with a Parent PLUS Loan is the child’s cost of attendance after subtracting any other financial assistance your child receives.

Each school determines its cost of attendance, which includes:

• Tuition and fees
• Room and board
• Books
• Supplies
• Equipment
• Transportation
• Loan fees
• Miscellaneous personal expenses

Since you need to indicate your requested loan amount on the Parent PLUS application, it’s a good idea to discuss the cost of attendance and the amount you’ll need to borrow with the financial aid office at your child’s college.

WHAT’S THE AVERAGE COST OF TUITION FOR COLLEGES IN THE U.S.?

4. Complete a Parent PLUS Loan application

Once you know how much you want to borrow, you can start the Parent PLUS application process online.

Here are the four main sections of the Direct PLUS Loan Application for Parents:

1. Loan information — Select the school year for which you plan on using the loan, the name and identifying information for the student you’re using the funds for, the school your child will attend, and how much you want to borrow.
2. Borrower information — Answer questions about your relationship to the student, citizenship status, contact information, and employment information.
3. Review — Review the answers you provided and verify that the information is correct.
4. Credit check and submit — Authorize a credit check, review some important financial disclosures, and check boxes to confirm you read the disclosures and completed the application accurately and completely.

You’ll either get an immediate decision stating your application is accepted, denied, or pending. A pending application could be because you have a security freeze on your credit, in which case you need to call the credit bureau to have the freeze lifted before reapplying. It could also be because the information you entered doesn’t match what’s on file with the credit bureau, in which case you need to call the Federal Student Aid Information Center at 1-800-433-3243 for help.

5. Sign the repayment agreement

If your application was approved, your next step is completing and signing a Master Promissory Note. This is essentially a loan agreement promising you’ll repay the loan, interest, and fees to the Department of Education.

To complete the note, you’ll need to provide information about your identity, your student, and the school they’re attending. You also need to give the names and contact information of two personal references who don’t live with you and have known you for at least three years. The Department of Education will contact these references in the future if it can’t reach you.

Finally, read through the terms and disclosures, review the information you provided for accuracy, then sign and submit.

6. Receive your loan

The federal government will send your loan funds to your child’s school to pay for tuition, room and board, and other charges. If any funds remain after covering those costs, the school will send the balance to you to help pay for books, equipment, and other expenses.

WHAT’S A STUDENT LOAN REFUND AND HOW DO YOU GET ONE?

7. Begin making a plan to repay the loan

By default, loan repayment starts right away. However, you can request a deferment while your child is enrolled and for six months after leaving school.

Your loan servicer should contact you to provide repayment instructions. Make sure you’re aware of when you need to start making monthly payments so you can factor them into your budget.

What if your parent PLUS application is denied?

If the Department of Education denies your Parent PLUS Loan application, you’re not out of luck. Consider the following options:

• Demonstrate extenuating circumstances. You can request an appeal if the denial was due to your credit history, and explain that the derogatory items on your credit report were due to extenuating circumstances.
• Find an endorser. If your application was denied because of your credit history, you might be able to qualify for a loan with an endorser. An endorser is like a cosigner, and they agree to repay the loan if you can’t.
• Apply for private student loans. Some private student loans offer a lower interest rate than federal Parent PLUS Loans.