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.

Important: Be sure to select the PLUS application link for the semester(s) that you intend to use the PLUS loan.

Fall 2017 / Spring 2018

  1. If this is your first time applying for a Parent PLUS Loan through Michigan State University, you will need to contact our office and request that the loan be added to your student's financial aid package. After contacting our office, there will be a 24-hour delay before you can proceed to step #2.
  2. Complete the following Loan Application Form (LAF) using our online process:
  3. Sign your Parent PLUS Master Promissory Note (MPN) at the StudentLoans.gov website, but do not complete the Parent PLUS application on this website (MSU uses the Loan Application Form linked above in step #2). The MPN will be valid for 10 years provided a PLUS loan is disbursed within 12 months of the MPN signing.

Summer 2017

  1. Complete the following Loan Application Form (LAF) and fax or mail it to the address on the form:
  2. Sign your Parent PLUS Master Promissory Note (MPN) at the StudentLoans.gov website, but do not complete the Parent PLUS application on this website (MSU uses the Loan Application Form linked above in step #1). The MPN will be valid for 10 years provided a PLUS loan is disbursed within 12 months of the MPN signing.

Fall 2016 / Spring 2017

  1. Complete the following Loan Application Form (LAF) using our online process:
  2. Sign your Parent PLUS Master Promissory Note (MPN) at the StudentLoans.gov website, but do not complete the Parent PLUS application on this website (MSU uses the Loan Application Form linked above in step #1). The MPN will be valid for 10 years provided a PLUS loan is disbursed within 12 months of the MPN signing.

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.

A video overview

Please take a moment to watch this video which covers a number of topics related to the PLUS loan.

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, 2017 is 7%.

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, 2016 require a 4.276% origination fee which is paid at the time of disbursement. Thus, 95.724% of the gross loan amount will be disbursed to the student's account.

What occurs during Parent PLUS processing?

  • After we receive the LAF, MSU confirms the student's eligibilty for a Parent PLUS loan and transmits the application to the PLUS loan servicer.
  • 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 to the student 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: