PLUS Loans Explained

The Parent PLUS loan is a federal student loan that is available to parents of dependent undergraduate students. Parent PLUS loans are intended to help pay school expenses not otherwise covered by the student's financial aid award; i.e. grants, scholarships, and student loans. Some of the benefits of a PLUS loan are fixed rates and flexible loan limits. For your convenience, we've included some general information about the PLUS loan as well as links with more detailed information.

  • The Parent PLUS loan offers a fixed 6.31% interest rate for the 2016-17 school year.
  • The Parent PLUS loan is a credit based loan, so adverse credit history can mean that a parent's loan application could be declined.
  • However, PLUS eligibility does not depend on the borrower's credit scores or debt-to-income ratios.
  • Parents with adverse credit history can still borrow with a co-signer who does not have an adverse credit history. In this situation, you will need to complete Credit Counseling which is good for 180 days.
  • If you are denied, your student becomes eligible for a larger Unsubsidized loan amount.
  • Stepparents can borrow from the Parent PLUS loan program as long as they are married to the student's parent.
  • PLUS loan repayment normally begins no later than 60 days after the loan is fully disbursed.
  • Standard repayment term is 10 years.
  • Parents must authorize the release to their student of any credit resulting from the PLUS loan. This can be done during the loan application or by contacting the SFS office in writing.

How To Apply for the PLUS loan

  1. Your student completes and signs the FAFSA online. You, as a parent, will also sign using a FSA ID.
  2. Your student submits the AU Financial Information Sheet with your signature.
  3. Your student will then receive an AU award letter offering them, and you, loans to accept or decline. (PLUS loan eligibity amounts will be listed)
  4. You will need to submit the PLUS loan request online (using the same FSA ID used to sign the FAFSA) or by paper. A credit check, which is good for 180 days, will be performed.
  5. If application is approved, the parent who applied for the PLUS loan will need to complete the Master Promissory Note.

Learn more about Federal Parent PLUS loans at the Federal Student Aid Website.