Federal Direct Parent (PLUS) Loans

The Federal Direct Parent Loan for Undergraduate Students (PLUS) is meant to assist parents in covering costs beyond any student financial aid. The PLUS loan is credit-based and is held solely in the parent's (and endorser's, if applicable) name for the life of the loan.

How do I apply for this loan and am I eligible?
Both you, the parent borrower, and the student must meet the general eligibility requirements for federal student aid.  For example, both must be a citizen or eligible non-citizen and may not be in default or owe a refund to any federal aid program. To be eligible to receive a Federal Direct PLUS Loan, you will be required to pass a credit check. If you do not pass the credit check, you may still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan, promising to repay it if you should fail to do so.

To apply, the parent will:

  • Log in to www.studentloans.gov with the PARENT PIN.
    • Tips: Remember that the PARENT is the borrower and STUDENT is the student.
    • Double check the student's SSN on the application.
  • Select the option "Request a Direct PLUS Loan." A credit decision is provided immediately upon submission of the application.
  • Complete the Master Promissory Note for the Parent PLUS Loan on the same website, if this is your first time borrowing a PLUS Loan for your Potsdam student and your loan is approved.
  • The loan application, credit decision, and Master Promissory Note are sent to SUNY Potsdam electronically.

If your parent's credit decision is denied, the parent may:

  • Request an "appeal." If there are errors in your credit report, or extenuating circumstances exist relating to your adverse credit history, the parent borrower may choose to appeal.When you select "appeal decision", it will start the appeal process.
    • If you are eligible for "fast-track" Reconsideration, a pop-up box will appear and prompt you to provide your contact information.PLEASE NOTE, once you submit your contact information, you will receive a decision within 24 hours.
    • If you are not eligible for "fast-track" Reconsideration, you will receive further instructions from StudentLoans.gov on how to submit additional documentation; or
  • Provide an endorser: The endorser must pass a credit check and sign a promissory note. An e-mail with the Loan Reference ID and an endorser packet will be mailed to the borrower. The endorser will need the Loan Reference ID to complete the paper packet or complete the Endorser Addendum online. The endorser must create a Federal PIN to sign in and go to "Endorse a PLUS Loan;” or
  • Not pursue the PLUS Loan: If the parent borrower is not interested in the first two options, the parent can select the option not to pursue the PLUS Loan – the student will be offered additional Federal Direct Unsubsidized Loans. Additional loans are available for up to $4,000/academic year for 1st and 2nd year students (fewer than 57 credit hours earned); and up to $5,000/academic year for 3rd and 4th year students (57 or more credit hours earned).

What is the interest rate and fees for this loan?
The interest rate is the rate of the 10-year Treasury note plus 4.6%.  The rate for new loans for the 2014-2015 academic year, first disbursed on or after July 1, 2014, is 7.21 percent.  The loan is "variable-fixed" meaning parents would receive a new rate with each new loan, but the rate would be fixed for the life of that loan.  Please check our News Page for changes to the terms of loans disbursed after March 1, 2013.

How much can I borrow?
The annual limit for a Federal Direct PLUS Loan is equal to the student’s cost of attendance minus any other financial aid the student received. If the cost of attendance is $20,000, for example, and the student received $8,000 in other financial aid, you can borrow up to an additional $12,000.

When do I begin repaying the loan?
You have the option of beginning repayment on the Federal Direct PLUS Loan either 60 days after the loan is fully disbursed (interest on the loan begins to accrue at this time) or waiting until six months after the dependent student on whose behalf the you borrowed ceases to be enrolled on at least a half-time basis. During any period of authorized deferment or forbearance the borrower can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of the loan). Capitalizing the interest will increase the amount the borrower will have to repay over the life of the loan.

Disbursement
Funds are normally disbursed in two equal installments and are credited directly to the student's account.

Direct PLUS Denial Exemption
In addition to potentially being eligible for additional unsubsidized Stafford loan funds if a parent is denied a PLUS, dependent students may also be eligible for additional unsubsidized loan amounts if the student can document certain exceptional circumstances which prevent a parent from borrowing a PLUS loan; specifically if:

  • The parent(s) is/are incarcerated; parent(s) must be custodial parent(s) and only parent on the FAFSA.  Provide documentation showing dates of incarceration.
  • The parent(s) has/have filed bankruptcy (provide a letter from bankruptcy court stating that as a condition of the bankruptcy filing, the parent may not incur any additional debt).
  • The parent’s income is limited to public assistance or disability benefits. Please indicate which federal program the parent receives benefits from (Supplemental Security Income; Food Stamps; Temporary Assistance for Needy Families (TANF); Special Supplemental Nutrition Program for Women, Infants and children (WIC); Other(Low Income Based Housing-Provide documentation from HUD Section 8 , Please specify) and provide documentation showing dates benefits were received.
  • The parent(s) is/are not a U.S. Citizen or permanent resident, or is/are not able to provide evidence from the U.S. Citizenship and Immigration Service that he or she is in the U.S. for other than a temporary purpose with the intention of becoming a citizen or permanent resident. Provide documentation showing evidence of citizenship or permanent residence outside the U.S.