Federal Direct Parent PLUS Loan
Frequently Asked Questions
Please note that on this page, “you” and “your” always refer to the student.
1. What is a Federal Direct Parent PLUS Loan (Parent PLUS)?
2. What if both of my parents want to borrow?
3. What are the basic eligibility requirements of parent applicants?
4. What if my parent is ineligible for a PLUS Loan?
5. What are the deadlines for my parent to apply for a PLUS Loan and complete the Master Promissory Note?
6. How does my parent apply for the PLUS Loan?
7. What happens next?
8. What about credit approval or denial?
9. How much can my parents borrow?
10. How is the Parent PLUS paid?
11. Can my parent cancel or reduce his or her loan even if the MPN has been signed and the loan has paid?
12. Besides interest, what other costs are there with the Parent PLUS?
13. When does my parent begin repaying the Parent PLUS?
14. Can my parent defer payments on the Parent PLUS?
15. How much will the Parent PLUS monthly payments be?
1. What is a Federal Direct Parent PLUS Loan (Parent PLUS)?
The Parent PLUS is a loan available to parents of dependent students. The lender is the U.S. Department of Education. Your financial aid package will include an offer of a PLUS Loan if there is a difference between your budget (or Cost of Attendance) and all other aid resources offered. The amount listed is your parent’s maximum eligibility and he or she may apply for any amount up to your maximum eligibility.
2. What if both of my parents want to borrow?
The Parent PLUS is issued to only one borrower. If both your parents want to borrow, they should each apply for a portion of your total eligibility. For example, if you are offered $10,000 in Parent PLUS, one parent can apply for $5,000 and the other parent can apply for $5,000. Your parents are not able to put both names on one loan.
3. What are the basic eligibility requirements of parent applicants?
- Be the biological or adoptive parent of the student. Step-parents are eligible only if their income information is reported on the Free Application for Federal Student Aid (FAFSA). Guardians are not eligible.
- Be a citizen, permanent resident, or other eligible non-citizen of the United States.
- Be creditworthy or secure a creditworthy co-signer (endorser).
- Have a federal personal identification number (PIN) (register for this at www.pin.ed.gov).
4. What if my parent is ineligible for a PLUS Loan?
If your parent is ineligible to borrow a PLUS Loan, you may receive additional Unsubsidized Direct Loan. Your parent will not be eligible to apply for a PLUS Loan if:
- He or she is not a citizen, permanent resident, or other eligible non-citizen of the United States.
- He or she is in default on a federal loan and have not made satisfactory repayment arrangements.
- He or she owes money for an overpayment on a federal grant.
If your parent is are not eligible because of one of the reasons above, the online PLUS application will not allow him or her to complete the application process. In order for you to receive the additional Unsubsidized Direct Loan, your parent needs to complete the Ineligible PLUS Borrower Form. Once we receive the completed form, and all required documentation, we will verify your parent's ineligible status and offer you the additional Unsubsidized Direct Loan. You can accept the additional loan on your MyFinAid account.
5. What are the deadlines for my parent to apply for a PLUS Loan and complete the Master Promissory Note?
The application and Master Promissory Note deadlines for the PLUS Loan are:
- For fall-only loans: October 30
- For fall/spring and spring-only loans: March 30
- For summer loans: no later than 4 weeks before the end of your summer enrollment period
6. How does my parent apply for the PLUS Loan?
Your parent needs to complete both an application and a Master Promissory Note anytime after May 15 for the upcoming academic year, or after March 30 for the upcoming summer term. The parent who is applying for the loan uses his or her federal PIN to log on to studentloans.gov. Then, in the “PLUS Loan Process” section of the left navigation, he or she can click “Request Direct PLUS Loan” and complete the application process. Your parent will find out immediately if the credit check is approved (see below for credit denial information). After completing the PLUS Request (application process), your parent should go back to the home page. If the credit is approved, or if your parent will use a creditworthy cosigner, click “Sign Master Promissory Note” and follow the Master Promissory Note process for a Parent PLUS Loan.
Parents can find Tips for Completing the Parent PLUS Loan Application in the Parents section of this website.
"If there is a credit balance after your Direct PLUS Loan has been applied to the student's school account, to whom do you want the school to pay the credit balance?"
Your parent will have the option to choose "Me" or "The Student." If they choose "The Student," any available refund will be processed within 7 to 10 business days from the disbursement of the loan. If they choose "Me" (refunds go to parent borrower), the refund process takes approximately 3 weeks. Because of the high volume of requests for payment to the borrower, this timeline for payment of refunds could increase.
If your parent needs funds from the Parent PLUS sooner than 3 weeks from the time of disbursement, he or she may wish to choose "The Student" option. You, the student, will receive the refund, and then you can transfer the refund back to your parent via personal check.
If your parent has already completed an application and wishes to change the refund designation from parent to student, your parent should send an email to plusloan@berkeley.edu.
7. What happens next?
Your parent will receive an email confirmation for the PLUS application and Master Promissory Note (MPN). Applications and MPN information for each academic year are posted to our system beginning in June.
8. What about credit approval or denial?
Approval of a Parent PLUS requires good credit, with certain exceptions made for late mortgage and medical bill payments. Parents who are denied a Parent PLUS because of credit will know they have been denied immediately upon completing the online application. They will be asked what they intend to do next:
- Appeal the decision.
- Get an endorser.
- Not pursue an endorser.
- Undecided.
If your parent says “Undecided,” then you will get the replacement loan only if your parent informs us directly that he or she has decided not to pursue an endorser. Your parent can do this by sending an email to plusloan@berkeley.edu. The email must provide the parent borrower's name, the student’s name and student ID number, and must be sent from the same parent email account that is recorded on the PLUS application.
If your parent is pursuing an endorser, the endorser must go to studentloans.gov website and complete the “Endorse Direct PLUS Loan” section. The endorser must have his or her own PIN. If your endorser chooses to complete a paper Endorser application, please note that any cross-outs or corrections invalidate the application. For this reason, we suggest that your endorser complete the online Endorser application.
9. How much can my parents borrow?
Your parent(s) can borrow up to the difference between your Cost of Attendance (see Total UC Berkeley Costs on your MyFinAid account) minus all other aid resources (see Award Details on your MyFinAid account) offered in your financial aid package.
Your parent will have the option to accept a specific loan amount of the “Maximum Eligibility” when he or she is completing the online PLUS application. If your parent chooses “Maximum Eligibility,” anytime an additional Parent PLUS is added to your financial aid package, it will automatically be processed, thereby increasing your parent’s total debt.
10. How is the Parent PLUS paid?
The conditions of payment of Parent PLUS funds are as follows:
- Parent PLUS proceeds will automatically pay outstanding charges on your Campus Accounts Receivable System (CARS) account.
- If the amount of the Parent PLUS and other financial assistance exceed the amount of your CARS bill, the excess funds will be transferred via Electronic Funds Transfer (EFT) within one week to the bank account on record if you establish an EFT agreement with Billing and Payment Services. You can sign up for EFT at https://eftstudent.berkeley.edu. If you do not sign up for EFT, any refund will be issued as a paper check to you within two weeks. You need to pick up paper refund checks in person at Cal Student Central, 120 Sproul Hall; hours are Monday through Friday, 9 a.m. to 4 p.m. You are notified by email when either the funds have been transferred via EFT or a paper check has been produced and is ready for you to pick up.
- If the proceeds of the Parent PLUS and other financial assistance do not exceed your charges, there will be no refund to issue and you are responsible for paying any remaining balance.
- If your parent is concerned about the management of excess funds you may receive via EFT or paper check, your parent may request to have the excess funds sent directly to him or her. However this process currently takes up to 3 weeks to complete. A faster way to get the excess funds is to allow the refund to be issued to you and make arrangements with your parent to transfer those funds back to your parent via personal check.
- For the academic year, the Parent PLUS is usually paid in two equal disbursements, one at the beginning of the fall semester and one at the beginning of the spring semester. Actual disbursements take place only after the Parent PLUS application and Master Promissory Note are completed, credit is approved, and you are enrolled in at least six units. If your parent completes the requirements before school starts, the fall portion of the loan will be disbursed about seven days before classes begin. If your parent completes the requirements for a fall-spring loan in the spring semester, both disbursements will occur in the spring semester. One-term loans are paid in one disbursement after the application requirements are met and after the semester starts.
- A summer Parent PLUS is disbursed seven days before classes begin in the first Summer Session in which you are enrolled. For example, if you are enrolled in Session A and Session E, you will receive the Parent PLUS funds at the beginning of Session A, provided the Parent PLUS application and MPN are completed, credit is approved, and you are enrolled in at least six units total for all of your Summer Sessions.
11. Can my parent cancel or reduce his or her loan even if the MPN has been signed and the loan has paid?
Yes. A parent can cancel or reduce a paid loan up to 120 days from the original disbursement date. Please note that the reduction will create a charge on your (the student’s) CARS account that must be paid. When your parent reduces the Requested Loan Amount as instructed below, the new loan amount will be split evenly between the fall and spring terms for your fall/spring loan. For example, if your parent has a loan for $10,000 that has paid $5,000 for the fall and wishes to cancel $1,000 of the fall disbursement, your parent will report a changed Requested Loan Amount of $8,000 which will then reduce both the fall and spring disbursements from $5,000 to $4,000. There is no way to reduce the fall disbursement from $5,000 to $4,000 and leave the spring disbursement at $5,000.
To cancel some or all of a paid Parent PLUS Loan, the parent who borrowed the loan must log on to studentloans.gov, and click on "Request a Direct PLUS Loan." It will look like a new request is being created, but later in the process, your parent will indicate that he or she is making a change. Your parent should scroll down and click on "Parent PLUS," then enter any required information and click "Continue." At the top of the page for "Step 2 (Student and Loan Info)," your parent should select "2012-13" from the Award Year drop-down menu, and then select you (the student) from the Select Student drop-down menu. Information will pre-populate most of the remaining page but your parent will need to re-answer some questions.
After your parent selects the School State ("California") and School Name ("University of California, Berkeley"), he or she will be asked for the reason a PLUS Request is being submitted. Your parent should click the radio button next to "Change," then click on the radio button to borrow a specific amount and enter the lower requested amount.
Your parent should then complete all other required fields and proceed through the end of the process. Once the change request is complete and your parent has received a confirmation email, we will receive the changed information electronically within 3 business days and process it within 5 to 7 days.
12. Besides interest, what other costs are there with the Parent PLUS?
Your parent will pay a fee of up to 4% of the amount borrowed. Fees are applied to each disbursement. For example, if your parent applies for a $10,000 Parent PLUS and it is disbursed half for fall and half for spring, each disbursement will be $5,000 less fees, or $4,800.
Here is the calculation:
$5,000 x 4% = $200 loan fee
$5,000 minus 4% fee ($200) = $4,800
13. When does my parent begin repaying the Parent PLUS?
Repayment begins 60 days after the loan is fully disbursed. Most loans are paid in two disbursements, one in the fall and one in the spring. For these loans, the earliest repayment could begin is in early March of the school year for which the loan was borrowed.
14. Can my parent defer payments on the Parent PLUS?
For PLUS Loans disbursed after July 1, 2008, your parent is eligible for an “in-school deferment”: they may defer repayment of principal and interest until 6 months after you cease to be enrolled at least half-time. Usually this is after you graduate, but if you take a semester other than summer off, or are otherwise not enrolled at least half-time, repayment on all Federal Direct Loans, including the Parent PLUS, must begin.
However, interest accrues while you are in school and it is capitalized as frequently as quarterly if your parent does not pay it. This means that as many as four times per year the principal of the PLUS Loan is increased by the amount of any unpaid accrued interest and then, interest is charged on the resulting higher principal amount. For this reason, we strongly encourage parents to make interest payments, if at all possible, when choosing in-school deferment.
Your parent must contact the Direct Loan Servicer at (800) 848-0979 to request in-school deferment.
15. How much will the Parent PLUS monthly payments be?
If you would like to find out about repayment amounts, please visit the Department of Education’s Loan Repayment Calculators at studentloans.gov. The standard repayment period is 10 years. Other payment options may reduce monthly payments and extend the repayment period.
If you have a PLUS Loan question that is not answered here, email us at plusloan@berkeley.edu.