Federal Direct PLUS Loan for Parents
The Parent Loan for Undergraduate Students (PLUS) is a federal direct loan that enables parents or stepparents (not legal guardians or grandparents) to borrow money that can be applied toward their dependent undergraduate student’s educational expenses.
It allows parents with good credit history to assist their children who are enrolled at least half-time (6 credits per semester) at a post-secondary school like Reedley College.
PLUS Loan eligibility is not based on financial need, but approval is dependent on the parent's credit history. The loans are made regardless of income level and are offered through the Direct Loan program.
PLUS Loans are borrowed directly from the federal government and have a fixed interest rate. This rate is set by the U.S. Government.
How much can I borrow?
Parents may borrow the entire Cost of Attendance minus any other financial aid or resources the student receives.
Financial aid includes any loans, grants, or work-study funding while resources may include scholarships, tuition/fee waivers, veterans benefits or vocational rehab.
Students who have been awarded financial aid also have a budget as part of their award package. This student budget, or Cost of Attendance, represents a ceiling or cap in the total amount of financial aid our office can provide.
We encourage all Federal Direct PLUS borrowers to review costs with their students and to borrow only the amount that will help ensure their success.
- Must be a dependent student
- Have a completed financial aid file with Reedley College (RC) in OK, Warning or Probation status
- Student and parents must be either U.S. Citizens, or eligible non-citizens with a U.S. address
- Parent must meet the credit eligibility requirements.
- Must be enrolled at least half time.
General Reminders about Direct PLUS Loans
- The U.S. Department of Education is the lender.
- The borrower must not have adverse credit history.
- The maximum loan amount is the student’s cost of attendance (determined by RC) minus any other financial aid received.
What are my options if the Parent PLUS is denied?
A parent borrower who is denied a Direct Parent PLUS Loan because of adverse credit has certain rights and options. A parent may take the following actions to see if the loan may still be approved:
- Appeal the credit decision:Appeal directly to Federal Direct Loan (FDL) Program. They can be contacted at 1-800-557-7394 (Option 3) for more information.
- Add an endorser (co-signer) to the loan: Obtain a credit-worthy endorser (co-signer). An endorser is someone who does not have an adverse credit history and agrees to repay the loan if the borrower is unable to repay it. The endorser may not be the student. An Endorser Addendum must be completed by the loan co-signer, and submitted to the Federal Direct Loan program for processing. For instructions, please contact Direct Loan Applicant Services at 1-800-557-7394 (Option 3). A parent with an endorser must complete the MPN each year.
In either of the above cases, it is a requirement that the student 1) Contact our office to let us know if their parent is pursuing one of the above options, and 2) Parent must complete PLUS Counseling at studentaid.gov before the loan funds can be disbursed to the student.
Additional unsubsidized direct student loan
If a Parent PLUS loan application is unsuccessful, it is possible for a student to apply for additional loan funds through Federal Direct Unsubsidized Loan program. The student may only apply for the additional Direct Unsubsidized Loan if their parent(s) have been denied. If the Parent PLUS Loan is later approved, the student will no longer be eligible for the additional Direct Unsubsidized Loan.
The PLUS Loan denial must be on file with our office before a request for an increase for additional unsubsidized student loan can be processed. To make a request to borrow the additional funds through the Federal Direct Unsubsidized Loan Program, a student will need to contact our office to indicate interest in the increased Unsubsidized loan amount they would like to borrow.
The following Direct Unsubsidized Loan limits may be added to the student borrower's combined Direct Subsidized and Unsubsidized loan limits:
- Up to $6,000 for a dependent student
Steps for applying for a Parent PLUS loan (Parent will need their FSA ID to complete these steps)
- Complete a Parent PLUS loan application
- Sign and submit a PLUS Master Promissory Note (MPN) for Parents
- Annual Student Loan Acknowledgment - Complete Annual Student Loan Acknowledgment every year you take out a student/parent loan.
- Complete and submit a Reedley College Direct PLUS Loan Borrower questionnaire to our office. Please be sure to indicate a dollar amount on this request. ‘MAX’ or ‘maximum’ is not acceptable.