Learn about the Direct PLUS loan, which enables a parent to borrow for an undergraduate student.
UMGC participates in the William D. Ford Federal Direct Parent Loan for Undergraduate Students (Direct PLUS Loan) Program. A Parent PLUS loan enables a parent to borrow for his or her dependent child. The U.S. Department of Education is the lender.
The interest rate for PLUS loans disbursed on or after July 1, 2016, and on or before June 30, 2017, is 6.31 percent. Loans disbursed on or after July 1, 2017 and on or before June 30, 2018, will have an interest rate of 7.00 percent. A 4.276 percent origination fee will be deducted by the U.S. Department of Education from the total of your loan before it is disbursed to your student account.
How to Apply
Parents who wish to apply for the Federal Direct Parent Plus loan must first complete the Free Application for Federal Student Aid (FAFSA). The Federal Direct Parent Plus Loan application must be completed through StudentLoans.gov. You will need to sign into the StudentLoans.gov Web site using your personal PIN number, which is the same one required to sign your dependent student's FAFSA form. To apply for a PIN or receive a new PIN, please visit the Federal Student Aid Pin website. Once you have signed into StudentLoans.gov, you may choose the Start Plus Application Process link.
The new StudentLoans.gov website gives you the option of applying to up to three institutions per dependent child and for multiple children during one application process. The site will also securely store your information to help streamline the process for future applications.
After you have completed the online application, the Department of Education (DOE) will process the application and credit approval. UMGC will receive this information from DOE within two business days.
As the parent of a dependent student, you may use a Parent PLUS loan to assist your student with their educational expenses.
Beginning March 29, 2015, applicants with adverse credit history may be eligible for a PLUS loan if they have extenuating circumstances or are able to obtain an endorser for the loan. These applicants will be required to complete special PLUS Loan counseling. This counseling is separate from the PLUS loan entrance counseling that is required for all Graduate PLUS Loan borrowers. UMGC cannot disburse loan monies to students with this new requirement until we have received confirmation of its completion.
Should the U.S. Department of Education deny your application, your son or daughter may apply for an additional Federal Direct Unsubsidized Loan.
In addition, the student for whom you borrow must meet all general eligibility requirements, including being enrolled in at least half-time status (6 credits).
Through the application process, the U.S. Department of Education will determine if you are a credit-eligible borrower. Once a determination of your eligibility is made, you will be informed you have been approved or denied for a PLUS loan.
You do not have to demonstrate financial need to borrow a PLUS Loan. The maximum amount you can borrow through the PLUS program equals the cost of attendance (COA) minus any other financial aid awarded to your son or daughter for the current academic year. If you are approved for a PLUS loan, UMGC will offer a loan in the amount of $10,000 or the difference between the COA and all other awarded financial aid, whichever is lower.
Note: You do not have to borrow the full amount of the PLUS Loan offered. If you would like to decrease the amount of the loan, your son or daughter can do so through MyUMGC.
Master Promissory Note
First-time PLUS borrowers are required to complete an MPN. You will only need to complete this once, unless your loan is approved with an endorser. Endorsed loan borrowers must complete a new MPN for each new endorsed loan. Complete your MPN here.
The Bursar’s Office will credit loan proceeds to the student’s account to pay tuition and other university charges. Remaining funds will refund to you or (with your permission) directly to the student. If you would like to allow the refund to go directly to your son or daughter, you can indicate your preference at the time you complete the PLUS loan application.
The repayment period for principal and interest begins after the loan has been fully disbursed. For example, a loan covering the fall and spring terms will enter repayment after the disbursement for the spring term. The first payment becomes due within 60 days after the final loan disbursement of loan proceeds for an academic year.
You will have three repayment options:
- The standard repayment plan requires even monthly payments of at least $50 over a fixed period of up to 10 years. This plan usually results in the lowest total interest paid because the repayment period is shorter than under the other plans.
- The extended repayment plan allows loan repayment over a period of up to 25 years, depending on the total amount borrowed. You still pay a fixed amount each month (at least $50), but the monthly payments usually will be less than under the standard repayment plan. This may make the repayment more manageable; however, usually you will pay more interest because the repayment period is longer.
- The graduated repayment plan allows payments to start out low and increase every two years. Your monthly payments must be at least half of what you would pay under standard repayment. The repayment period is up to 10 years, depending on the total amount borrowed. Again, you may find it easier to manage the lower monthly payments; however, you will pay more interest because the repayment period will be longer
NOTE: You can prepay all or a portion of your loan at any time without penalty.
If your Direct PLUS loan was first disbursed on or after July 1, 2008, you may defer payment on the loan while the student for whom you obtained it is enrolled at least half time, and for an additional six months after the student graduates or drops below half-time enrollment. You must request each deferment period separately.
If you're a parent PLUS borrower who is also a student, you can defer repayment while you're enrolled in school at least half time for an additional six months after you graduate or drop below half-time enrollment for Direct PLUS Loans first disbursed on or after July 1, 2008.
Additional Information on Borrowing
You can estimate your monthly payments with various repayment plans using repayment calculators available online from the U.S. Department of Education’s website. The site also contains information on consolidating your PLUS loan(s) with other personal loans or discharging your loan under specific circumstances.
For more information on the cost of borrowing or repayment, call the Federal Student Aid Information Center at 1-800-4FEDAID (1-800-433-3243).