Federal Parent PLUS Loans
A Federal Parent PLUS Loan is a low interest rate loan for parents that can be used to help pay for the college education of a dependent undergraduate child.
Eligibility
- The parent of a dependent student is eligible to borrow in the Direct PLUS program as long as the student is enrolled at least half time and the parent does not have an adverse credit history.
- The parent applicant will be ineligible if the credit history indicates "he or she is 90 days or more delinquent on any debt or has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt during the five years preceding the date of the credit report". The credit history will not be reviewed by the Federal Direct Loan processor until Purdue has processed a Parent PLUS Loan request.
- The borrower must be a U.S. citizen, U.S. national, or permanent resident of the United States.
- Financial need is not a requirement to obtain a PLUS Loan, but the borrower is responsible for interest that accrues.
Award Amounts
PLUS Loan limits are determined by the estimated cost of attendance less any other aid.
Interest Rates and Fees
For PLUS Loans the interest rate is fixed at 7.9%. The effective up front fee will be 2.5% of the loan. For example, the proceeds of a $10,000 loan will be reduced by $250. If the borrower fails to make 12 consecutive on-time payments, they will be billed an additional 1.5% fee.
Steps to apply for a Federal PLUS Loan
- File the Free Application for Federal Student Aid (FAFSA), recommended for Parent PLUS, and submit all documents requested by the Division of Financial Aid (DFA); check for required documents via the online Financial Aid Self Service system through myPurdue.
- DFA will send the student an Award Notice that the student can use to determine loan period, the type of eligibility, and the amount of eligibility; the grad student or parent borrower needs to use this information to determine how much they want to borrow.
- Parent PLUS borrowers must submit a paper Purdue Parent PLUS Loan Request Form where they will indicate a requested loan amount and certify borrower eligibility. 2009-10 forms are available for download: 2009-10 form
. - DFA will certify borrower eligibility with the loan service provider. The loan service provider approves the loan after the borrower completes a PLUS Master Promissory Note (MPN) at www.dlenote.ed.gov (if not already on file).
- PLUS Loan funds are normally sent electronically to the Purdue Bursar by the loan service provider. The borrower will be notified by the Bursar’s Office that funds have arrived. Funds are applied first to fees, then to any housing costs (if the Bursar bills for housing). Any remaining PLUS funds are sent to the borrower. Please note that it is important that students keep their address up-to-date via myPurdue and read all email from facontact@purdue.edu.
Repayment Information
Loan repayment may be deferred in the PLUS program beginning July 1, 2008 if the student remains enrolled at least half time (but interest accrues). If the student also took out a Stafford Loan, the parent can call the Direct Loan Servicer to request the deferment. If not the parent has to complete a form. For information regarding in school deferments please contact the Direct Loan Servicer at 1-8(800) 848-0978. If you would like more information regarding repayment, visit our general student loan counseling page.
Income-Based Program
A repayment program that caps monthly payments based on income.
- Pay no more than 15% of your discretionary income based on the federal poverty guidelines.
- If your income falls below 150% of the poverty level no payments will be required.
- Any balance after 25 years of qualifying payments will be forgiven.
- For more information visit IBRinfo.org.
Amount Borrowed |
Payment |
$5,000 |
$60 |
$10,000 |
$121 |
$20,000 |
$242 |
$30,000 |
$462 |
Sample Estimated Monthly Repayment Chart: Assumes interest rate of 7.9% and all payments made as scheduled on 10-year repayment term (excludes any borrower benefit savings). Borrowers can estimate monthly payments at www.finaid.org/calculators/loanpayments.phtml.