The Federal Direct Parent Loan for Undergraduate Students (Direct PLUS Loan) Program
UMUC participates in the William D. Ford Federal Direct Parent Loan for Undergraduate Students (Direct PLUS Loan) Program. A Parent PLUS loan enables a parent to borrow for his or her dependent child. The U.S. Department of Education is the lender.
- How to Apply
- Loan Limit
- Loan Terms
- Promissory Note
- Additional Information on Borrowing
Parents who wish to apply for the Federal Direct Parent PLUS loan must first complete the Free Application for Federal Student Aid (FAFSA). The Federal Direct Parent PLUS Loan application must be completed through StudentLoans.gov. You will need to sign into the StudentLoans.gov Web site using your personal PIN number, which is the same one required to sign your dependent student's FAFSA form. To apply for a PIN or receive a new PIN, please visit the Federal Student Aid Pin Web site. Once you have signed into StudentLoans.gov, you may choose the Start PLUS Application Process link.
The new StudentLoans.gov Web site gives you the option of applying to up to three institutions per dependent child and for multiple children during one application process. The site will also securely store your information to help streamline the process for future applications.
After you have completed the online application, the Department of Education (DOE) will process the application and credit approval. UMUC typically receives this information from DOE within two business days.
As the parent of a dependent student, you may use a Parent PLUS loan to assist your student with their educational expenses.
Beginning March 29, 2015, applicants with adverse credit history may be eligible for a PLUS loan if they have extenuating circumstances or are able to obtain an endorser for the loan. These applicants will be required to complete special PLUS Loan counseling. This counseling is separate from the PLUS loan entrance counseling that is required for all Graduate PLUS Loan borrowers. UMUC cannot disburse loan monies to students with this new requirement until we have received confirmation of its completion.
Should the U.S. Department of Education deny your application, your son or daughter may apply for an additional Federal Direct Unsubsidized Loan.
In addition, the student for whom you borrow must meet all general eligibility requirements, including being enrolled in at least half-time status (6 credits).
Through the application process, the U.S. Department of Education will determine if you are a credit-eligible borrower. Once a determination of your eligibility is made, you will be informed you have been approved or denied for a PLUS loan.
You do not have to demonstrate need to borrow a Direct PLUS Loan. If your son or daughter applies for student financial aid, your Financial Aid Award Letter from the Financial Aid Office will show the maximum amount you can borrow. Your Direct PLUS Loan offer equals the cost of attendance minus any other financial aid offered to your son or daughter for the current academic year.
Note: You do not have to borrow the full amount of the Direct PLUS Loan offered.
The interest rate for PLUS loans disbursed on or after July 1, 2015 and on or before June 30, 2016 will be 6.84%. There is a 4.272% origination fee that will be deducted by the U.S. Department of Education from the total of your loan before it is disbursed to your student account.
Borrowing from the PLUS Loan program requires the completion of a Master Promissory Note (MPN). You can use the MPN to make one or more loans for one or more academic years while the student for whom you are borrowing is enrolled at UMUC.
The Bursar’s Office will credit loan proceeds to the student’s account to pay tuition and other university charges. Remaining funds go to you or—with your permission—directly to the student.
The repayment period for principle and interest begins the day after the loan has been fully disbursed. For example, a loan covering the fall and spring terms will enter repayment after the disbursement for the spring term. The first payment becomes due within 60 days after the final loan disbursement of loan proceeds for an academic year.
You will have three repayment options:
- The Standard Repayment Plan requires even monthly payments of at least $50 over a fixed period of up to 10 years. This plan usually results in the lowest total interest paid because the repayment period is shorter than under the other plans.
- The Extended Repayment Plan allows loan repayment over a period of 12 to 30 years, depending on the total amount borrowed. You still pay a fixed amount each month (at least $50), but the monthly payments usually will be less than under the Standard Repayment Plan. This may make the repayment more manageable; however, usually you will pay more interest because the repayment period is longer.
- The Graduated Repayment Plan allows payments to start out low and increase every two years. Your monthly payments must be at least half of what you would pay under Standard Repayment. As in the Extended Repayment Plan, the repayment period will vary from 12 to 30 years, depending on the total amount borrowed. Again, you may find it easier to manage the lower monthly payments; however, you will pay more interest because the repayment period will be longer.
NOTE: You can prepay all or a portion of your loan at any time without penalty.
If your Direct PLUS loan was first disbursed on or after July 1, 2008, you may defer payment on the loan while the student for whom you obtained it is enrolled at
least half time, and for an additional six months after the student graduates or
drops below half-time enrollment. You must request each deferment
If you're a parent PLUS borrower who is also a student, you can defer repayment while you're enrolled in school at least half time for an additional six months after you graduate or drop below half-time enrollment for Direct PLUS Loans first disbursed on or after July 1, 2008.
You can estimate your monthly payments with various repayment plans using repayment calculators available online from the U.S. Department of Education's Web site. The site also contains information on consolidating your PLUS loan(s) with other personal loans or discharging your loan under specific circumstances.
For more information on the cost of borrowing or repayment, call the Federal Student Aid Information Center at 1-800-4FEDAID (1-800-433-3243).