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Parent PLUS Loan

Eligibility

First, the student must have a FAFSA on file. Then you may borrow a Parent PLUS loan if:

  • You are the parent or stepparent of a dependent student.
  • You are not in default on any federal education loans.
  • You are a U.S. citizen or eligible non-citizen.

If you are not the custodial parent, you may still borrow a PLUS on the student's behalf.

How to apply

The Parent PLUS application is a multi-step process. If you do not complete each step, your loan will not be processed.

Available April 7th for the Fall 2022 / Spring 2023 / Summer 2023 semesters:

  1. Go to StudentLoans.gov. The parent will need to sign in with their FSA ID or create one if needed.
  2. Complete the Direct PLUS Loan application for Parents. MSU School code is G02290.
  3. Complete a PLUS loan Master Promissory Note (MPN) for Parents. The MPN will be valid for 10 years provided a PLUS loan is disbursed within 12 months of the MPN signing. If the loan is approved with an endorser, the MPN will need to be renewed annually.

Once you have applied, if you would like to increase your requested amount, do not apply for a new loan. This request can be made from the parent by contacting the Office of Financial Aid.

PLUS Counseling is required for borrowers who have an endorser listed on the loan or appeal an original credit decision.

When to apply

You should begin the application process 4 to 6 weeks before you need the funds to ensure timely processing. Depending on the time of year, it may take several weeks for the servicer to send notice of your credit approval or rejection.

Loan limits

The loan limit for each year is the annual cost of attendance (a.k.a. the "budget") minus other financial assistance. If your requested amount is too high, it will be reduced to fit within the student's budget.

Interest rate

Beginning July 1, 2013, the Parent PLUS interest rate varies annually with a maximum rate of 10.5%. The interest rate for PLUS loans disbursed on or after July 1, 2022 is 7.54%.

Interest begins to accumulate when the first disbursement is made. You may choose to pay the interest while the student is in school in order to avoid "paying interest on interest" (capitalizing interest).

Loan fees

Parent PLUS loans disbursed on or after October 1, 2020 require a 4.228% origination fee which is paid at the time of disbursement. Thus, 95.772% of the gross loan amount will be disbursed to the student's account.

What occurs during Parent PLUS processing?

  • Once the loan application has been completed, the servicer performs a credit check.
  • The servicer notifies the parent of acceptance or rejection of the loan.
  • If the loan is approved, funds are sent directly to MSU and applied against the student's bill.
  • Any PLUS funds that exceed MSU charges are given as a refund by the Student Accounts division of the Controller's Office.

Disbursement

Disbursement of Parent PLUS funds depends on when the loan is approved. By law, Parent PLUS funds cannot be disbursed until 10 days prior to the student's first day of class in a semester or summer subterm. If that date has passed and the approval process has been completed, MSU will generally disburse the funds within 2 days of approval.

Repayment

The first payment is due within 60 days after each loan is fully disbursed, which generally means that the first payment of a fall/spring loan will be due in February. However, the borrower may choose to defer the first payment until 6 months after the student ceases to be enrolled half-time or more.

Alternatives if you are not approved

These are some options the family may want to consider: