Take the steps to begin your journey:
Parent Loan For Undergraduate Students (PLUS)
Loans are made by the Department of Education to parents of undergraduate students to assist in meeting education costs. Eligible parents may borrow the difference between the student’s cost of attendance and other financial assistance the student is eligible to receive. For example:
Mike Texan is an entering freshman. He has been awarded a total of $10,000, consisting of Federal and State Grants, Federal Work Study, and Federal Stafford Loans. Mike’s cost of attendance (COA) as determined by the Financial Aid Office is $19,414 for the 14-15 year (this cost of attendance includes tuition/fees, on-campus room and board, and estimates for books/supplies, transportation, and personal expenses)
Mike’s Mom or Dad can borrow up to $9,414 which represents the difference between Mike’s aid and his cost of attendance.
Parent eligibility requirements for a Direct Plus Loan
You must be the biological or adoptive parent or stepparent, of a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. Half-time enrollment at Tarleton is a minimum of 6 semester credit hours. For financial aid purposes, a student is considered "dependent" if he or she is under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid (FAFSA) is submitted. (Exceptions are made for veterans, wards of the court, and other special circumstances.)
Additional requirements to receive a Plus loan
Parent Plus Loan borrowers cannot have an adverse credit history (a credit check will be done). In addition, the parent borrower and the dependent child must be U.S. citizens or eligible non-citizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs. You can find more information about these requirements in Funding Education Beyond High School: The Guide to Federal Student Aid.
Applying for a Plus Loan, the Required Credit Check, and the Master Promissory Note (MPN)
To take out a PLUS Loan for the first time, a parent must:
- Complete a Plus Application on-line at the studentloans.gov.
- Undergo a credit check; to be eligible for a Plus Loan, you must not have an adverse credit history, which the Department will check for as part of the application process. If you are found to have an adverse credit history, you may still borrow a Plus Loan if you get an endorser who is creditworthy an endorser is someone who agrees to repay the loan if you do not. In some cases you may also be able to obtain a Plus Loan if you document that there are extenuating circumstances related to your adverse credit history.
Your dependent student cannot be an endorser.
- Complete a master promissory note (MPN). The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan(s). The MPN can also be completed online at studentloans.gov to complete an MPN online; you will be required to use your Department of Education-issued PIN (not your dependent students). If you do not have a Pin, you may request one from the official PIN web site.
In most cases, once you've submitted the MPN and it's been accepted, you won't have to fill out a new MPN for future loans you receive to pay for your dependent's educational expenses. Typically you can borrow additional Direct Loans on a single MPN for up to 10 years. Your approved MPN will be transmitted electronically to our office.
You'll receive a disclosure statement that gives you specific information about any loan that the school plans to disburse under your MPN, including the loan amount and loan fees, and the expected loan disbursement dates and amounts.
Interest rate and loan charges
The Interest rate for Direct PLUS Loans is fixed. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement.
In addition to interest, you pay a loan origination fee that is a percentage of the principal amount of each Direct PLUS Loan that you receive. This fee helps reduce the cost of making these low-interest loans.
The Department of Education deducts the fee before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay.
If you apply for a PLUS Loan but you are unable to receive the loan your dependent may be eligible to receive additional Direct, Unsubsidized Loan funds. In this case, the student would need to complete and submit a Revision Request Form along with a copy of the parents’ PLUS Loan Denial to the financial aid office for processing.
How a loan is disbursed (paid out)
Generally, your loan will cover a full academic year and Tarleton will make at least two disbursements to you, for example, at the beginning of each semester.
In most cases Tarleton State University will disburse your loan money by crediting it to Mike’s account to pay tuition, fees, room, board, and other authorized charges. If the combination of your dependent's financial aid and your PLUS Loan disbursement amount exceeds his Tarleton charges, the school will pay you the remaining balance of the disbursement directly by check or, with your permission, the school may disburse some of the PLUS Loan money directly to your dependent. It is important that you indicate on the PLUS application to whom you want any credit balance released.
Tarleton State University will notify you in writing each time a part of your loan is disbursed and will provide information about how to cancel all or part of your disbursement if you find you no longer need the money. You will also receive a notice from the Department of Education Loan Servicing Center confirming the disbursement. You should read and keep all correspondence received concerning your loan.