Federal Direct Parent PLUS Loan
You may need funds in addition to your student's Stafford loan to pay for your student's education. The Federal Direct Parent PLUS Loan is available to parents of dependent undergraduate students.
- Loan term period
- Interest rate and fee
- How to apply
- What to do when your application is approved
- Understand net vs. gross loan amounts
- How to increase or decrease the loan amount
- What to do if your application is denied
To be considered for the Parent PLUS loan:
- Your student must meet
- You, the parent of a dependent undergraduate student, must be the biological, adoptive, or step-parent
- You must be a U.S. citizen or eligible non-citizen
- You must not be in default on repayment of federal aid
- You must consent to, and pass a credit check by the U.S. Department of Education
Your debt-to-income ratio, credit score, and employment status are not taken into consideration; however, adverse credit typically results in a PLUS loan denial. For more information about adverse credit, visit StudentLoans.gov, click on the subheading "Credit Check" then the question "What is Adverse Credit?"
There are four loan term periods—fall/spring, fall only, spring only or summer only. If your student is planning to attend both the fall and spring semesters, we recommend applying for the fall/spring loan period.
If you choose a fall/spring loan period, the amount of the loan will be split equally between the two semesters; so the disbursement of a $10,000 fall/spring loan would be $5,000 for the fall semester and $5,000 for the spring semester.
The loan interest rate is fixed at 7.9 percent for the life of the loan. There is a 4 percent origination fee.
As of July 1, 2012, the 1.5 percent federal on-time repayment incentive, which previously resulted in a net fee of 2.5 percent, will be discontinued.
Instructions on how to apply for the Parent PLUS Loan are available below and in video
For assistance with your PLUS loan application and calculation, we recommend using both the instructions below and our video tutorials and How Much of the Parent PLUS Loan Should I Borrow?
1. First, complete the Free Application for Federal Student Aid (FAFSA).
2. Then, calculate how much you want to borrow and determine the loan period. The total amount you can borrow is equal to your student's Cost of Attendance minus other Estimated Aid (these figures are listed on your student's Student Aid Summary on eLion).
3. Next, calculate the loan fee. Divide the total loan amount by 0.96.
Request $10,416 ($10,000/0.96 = $10,416) to receive a total of $10,000
4. Create a Friends of Penn State (FPS) account to access the PLUS Request Form on eLion.
Per federal regulation only parents are eligible to apply for a Parent PLUS loan and sign a Parent PLUS Master Promissory Note (MPN). For your security you, the parent, must create your own Friends of Penn State Account on eLion. It is fraudulent for anyone else to use your personal information.
5. Access the Parent PLUS Request Form
Your student will need to select "Parent/Other Access" on eLion and enter your FPS ID to grant you access to the PLUS Request Form.
If your student is new to Penn State, the "Parent/Other Access" option will be available once he/she attends the First-Year Testing, Consulting, and Advising Program (FTCAP) or visits a Penn State Access Account Signature Station to gain full eLion access.
6. Submit the PLUS Request Form:
- Access eLion and select "Parent/Other"
- Enter your FPS account ID and password
- Select "PLUS Request Form"
- Choose your loan term period from the drop-down menu
You will receive an immediate confirmation upon submitting the form. Direct Loans will notify you of the results of your credit check by letter within 7 to 10 days. Results will also be sent to our office electronically.
If you are a first-time borrower, use your Federal Student Aid PIN (same PIN used for the FAFSA) to log into StudentLoans.gov.
Choose "Complete Master Promissory Note (MPN)" then select "Parent PLUS." Follow the four-step process to accept your loan.
Financial aid made easier!
Listen to our 90 Seconds or Less podcast on signing the
If you have technical difficulty signing the MPN, please contact the U.S. Department of Education’s Direct Loan Applicant Services at 800-557-7394. You may request a paper MPN from our office; however, processing may take three to four weeks, more than double the time it takes to process online.
After you have signed your MPN, your loan will appear as a credit on the tuition bill. If a credit balance remains after your student's tuition bill is paid in full, there may be a refund.
Your approved and accepted PLUS loan will appear on both the Student Aid Summary and Bursar Tuition Bills section on eLion; however, the loan amounts will be different. The loan amount on the Student Aid Summary is the gross amount. In contrast, the Bursar Tuition Bills section will reflect the net amount after the loan origination fees have been deducted.
Once you have accepted your loan and your student has completed his or her registration, funds will automatically disburse to your student's account after classes begin.
To increase your loan amount, you must complete another PLUS Request Form on eLion, but only for the additional amount needed. Another credit check will not be performed if the request is for the same loan term period. To decrease your loan, please contact us.
The U.S. Department of Education will mail you credit appeal and endorser information. You may use an endorser as a co-signer for the loan. Your student will automatically be awarded additional unsubsidized Stafford loan funds. If you, another parent borrower, or credit-worthy endorser are later approved through the appeal process, your student will no longer be eligible for the additional unsubsidized Stafford loan.
If you are approved with an endorser, you will need to sign a new MPN for each endorsed loan. Contact Direct Loan Applicant Services at 800-557-7394 for more information regarding your denial, appeal, or endorser process.