PLUS Loan for Parents of Undergraduates
Parents of undergraduates may borrow a Federal Direct PLUS Loan to pay the educational expenses of a dependent student. Beginning with the 2008-2009 academic year, parents will apply for a Parent PLUS loan through the Direct Loan program.
Wayne State University requires dependent undergraduate students to file the Free Application for Federal Student Aid (FAFSA) if their parents wish to borrow a PLUS Loan. Filing the FAFSA ensures that students receive the maximum financial aid for which they are eligible.
Parents who have previously borrowed a PLUS Loan, will be required to apply through the Federal Direct Loan program beginning with the 2008-2009 academic year. Parents who have previously borrowed through the Federal Family Education Loan (FFEL) program will be mailed notifications to include instructions regarding how to complete the Direct Loan PLUS application process.
- Who Can Borrow
- Parent Eligibility
- Application Process
- Interest Rate
- Disbursement
- Applicant Services
- Credit Criteria
- Credit Approval
- Credit Denial
- Repayment
Parents* may borrow a Direct PLUS Loan to pay the education expenses of each child who is a dependent undergraduate student enrolled at least half time.
*The parent-borrower must be the student's biological or adoptive mother or father. The spouse of a parent who has remarried, (step-parent), is also eligible to borrow a PLUS Loan on the student's behalf, if his/her income and assets will be taken into account when calculating the dependent student's expected family contribution (EFC). A legal guardian is not considered a parent for any federal student financial aid purposes.
A parent PLUS loan borrower must meet the same citizenship and residency requirements as the student. The parent must not owe a refund on a federal student financial aid grant or be in default on a federal student loan.
The application process must be completed each year just as the Free Application for Federal Student Aid (FAFSA) is completed each year.
- The PLUS loan amount listed on the student's award notification is the maximum PLUS loan amount a parent may borrow for that student for that aid period.
- The parent borrower must apply for the PLUS loan each year by completing the Direct Parent PLUS Loan Application and submitting it to the Office of Student Financial Aid.
- After the Office of Student Financial Aid (OSFA) receives the Direct Parent PLUS Loan Application, OSFA will send the PLUS loan application electronically to the Direct Loan Servicing Center for a credit check review.
- The parent borrower must complete the Federal Direct Parent PLUS Loan Master Promissory Note (MPN) online at www.dlenote.ed.gov. The MPN serves only as a promissory note. It does not automatically generate the PLUS loan funds each year. Parents are not required to sign a Direct Parent PLUS Loan MPN each year; however, they are required to submit the Direct Parent PLUS Loan Application.
Please review the Direct Parent PLUS Loan Information and Instructions Sheet for dealines and further information.
- 2008-09 Parent PLUS Loan Information & Instruction Sheet
- 2009-10 Parent PLUS Loan Information & Instruction Sheet
A parent can borrow a PLUS Loan for an amount that is equal to the student cost of attendance (student budget) minus any other financial aid the student is receiving.
The fixed interest rate for Federal Direct PLUS Loans is 7.9%.
PLUS Loans are disbursed in two installments for the academic year, half in the fall semester, and half in the winter semester. These disbursements are of equal value. Example: Parent is approved for $5,000.00 for a Fall and Winter loan. The disbursement will be $2,500.00 for Fall and $2,500.00 for Winter.
Funds are electronically transmitted to WSU and applied to the student's tuition account. Excess funds, if any, are issued via check and mailed to the parent borrower. Parent PLUS borrowers who want excess funds issued directly to their son or daughter must inform our office of this during the application process.
Funds are electronically transmitted to WSU and applied to the student's tuition account. Excess funds, if any, are issued via check and mailed to the parent borrower. Parent PLUS borrowers who want excess funds issued directly to their son or daughter must inform our office of this during the application process.
- 800-557-7394 8 am to 8 pm (ET), Monday thru Friday
- 877-461-7010 Telecommunication Device for the Deaf (TDD)
Plus Borrowers can contact Applicant Services for:
- Credit Appeal Overrides
- Endorser Application Questions
Credit approval is based on federally mandated criteria, not a credit score. In order to qualify, you must not have any of the following items on your credit report:
- Any current delinquency of 90 days or more
- Any of the following items within the preceding five years of the date of the credit report: Default, Bankruptcy, Discharge, Foreclosure, Repossession, Tax Lien, Wage Garnishment, Write-off of a Title IV Debt, Open Collection
Credit approval is valid for 6 months. Your credit is evaluated every time you request a new loan unless you have had a credit decision within the proceeding 6 months.
If you think you may have one or more of the items outlined in the credit requirements listed above you may want to obtain your credit report in advance. You may be able to fix an item such as the delinquency by simply making a payment and bringing your delinquency to less than 90 days. If you have had a situation with a discharge or collection item for example, you may be able to obtain a “settled in full” status if you work with the entity to reach a satisfactory arrangement. If you are able to fix an item, it is no longer considered in the credit evaluation and it may result in your credit being approved.
- Apply with an endorser
- Correct any invalid information on your credit report that may have led to the denial
- Appeal the denial
Recent changes in the law that governs the terms and conditions of PLUS loans establish a specific extenuating circumstance for certain PLUS loan applicants who would otherwise be considered to have an adverse credit history. Specifically, a PLUS loan applicant may qualify for a PLUS loan based on extenuating circumstances if the applicant -
- Has been or is delinquent for 180 days or less on mortgage loan payments, or on medical bill payments for the applicant or the applicant’s family, and
- Does not otherwise have an adverse credit history as determined in accordance with the federal regulations that apply to PLUS loan applicants.
An insert explaining the new provision will be included in all correspondence packages sent to Direct PLUS Loan applicants who receive an adverse credit determination. Information will include instructions to appeal the denial of a Direct PLUS Loan application.
If the Parent PLUS Loan is Denied
- Processing of the Parent PLUS Loan stops
- The Direct Loan Servicing Center will notify the parent and explain why the review of his/her credit history was denied.
- The parent may contact the Direct Loan Servicing Center (800-557-7394) to either appeal the decision, or investigate the option of securing an endorser.
- If the parent does not respond within 45 days of a denied credit decision, the Financial Aid Office will cancel the loan.
- The Financial Aid Office will note the denial on the student record and attempt to offer the student additional Federal Direct Unsubsidized Loan funds as part of their financial aid award.
- Parents who have questions about credit approval or denial, must contact the Federal Direct Loan Servicing Center at (800) 557-7394.
Repayment begins within 60 days of the final loan disbursement during the academic year, and parents will have ten years during which to repay the loan.
Postpone Repayment on a Federal Direct Parent PLUS Loan
Parents can defer repayment of the Federal Direct Parent PLUS Loan for up to one year by applying for a General Forbearance, and can re-apply for this provision annually while their student is enrolled at least half-time as an undergraduate. To apply electronically, parents can complete the electronic General Forbearance Form or contact the U.S. Department of Education's processing center at (800) 848-0979. To qualify, parents must state verbally or in writing that they are financially unable to make the monthly payments. Parents cannot apply for this forbearance until the loan has fully disbursed and prior to the repayment period beginning. If parents choose the forbearance provision, it is important to note you can pay the interest while the student is in school to decrease the amount that will be repaid.
Additonal information can be found on the Federal Student Aid web site.