2. How long does it take to process a Federal Direct Parent PLUS Loan? Depending on the time of year, processing can take 2-4 weeks.
A refund is issued to the parent-borrower 7-10 days after the loan has been disbursed to the student's account. The parent-borrow may elect to receive their refund via Digital Disbursement via Zelle or by Paper check.
How Funds Are Delivered. The school will first apply parent PLUS loan funds to the student's school account to pay for tuition, fees, room and board, and other school charges. If any loan funds remain, your child's school will give them to you to help pay other education expenses for the student.
Financial aid funds will typically start to disburse (meaning post to your tuition and fees account balance) 10-14 days after the “Last day to drop with a refund” for your latest starting classes. Different types of aid (such as Pell Grants, Student Loans, or Scholarships) may post on different days.
Disbursements can take anywhere from one day to five days. Three days is a common term for electronic transfers from one consumer's bank account to another's. Often, these are business days/week days, though—so depending on how the dates fall, a three-day disbursement might actually take five days.
To check on the status of financial aid being disbursed (paid out) to you or your account, check with your college or career school's financial aid office.
You will be notified immediately if your credit was approved or denied. If the credit check was approved, the next step is to complete a Master Promissory Note (MPN). The Direct Loan system will display if a Master Promissory Note has been completed for your student. If not, it will prompt you to complete an MPN.
How to Use the Double Consolidation Loophole: The key to using the double consolidation loophole is to consolidate each of your Parent PLUS Loans twice. In this scenario, a borrower can have as few as two Parent PLUS Loans.
Unlike all other federal student loans, there are no explicit borrowing limits for parent PLUS loans. Parents may borrow up to the full cost of attendance, which is determined by the institution, not the government, and includes books, travel and living expenses. There are no ability-to-repay standards for PLUS loans.
Choose how much you want to borrow
Parent PLUS Loans are awarded for up to the full cost of attendance minus any other financial aid a student's received. Funds are sent directly to the school.
Loans and Their Grace Periods
No payments are required during this six-month deferment period. If you're a parent borrower who took out a PLUS loan to pay for your child's education, you can request a six-month deferment after your child graduates, leaves school, or drops below half-time enrollment.
College refund timelines vary by school, typically taking several days to two weeks. Submitting a late or incomplete Free Application for Federal Student Aid (FAFSA) can delay a college refund. Refunds may be issued as paper checks, direct deposits, or credits to student accounts.
Parent PLUS loan refunds will be paid to the Parent borrower via check or direct deposit. If the parent has designated that the student will receive any refunds, the refund will be sent to the student account via direct deposit.
Parent PLUS loans can potentially be forgiven after 10 years under specific conditions, such as through the Public Service Loan Forgiveness (PSLF) program after consolidation into a direct consolidation loan. Parent borrowers must enroll in the Income-Contingent Repayment (ICR) plan to qualify for PSLF.
If there is money left over, the school will pay it to your parent, usually by check. In some cases, with your parent's permission, the school may disburse the leftover money to you.
If you're a parent or graduate student seeking a Direct PLUS Loan, one of the requirements to qualify is that you must not have an adverse credit history. If your application is denied because of an adverse credit history, don't give up. You still have options.
The $100,000 Loophole.
With a larger below-market loan, the $100,000 loophole can save you from unwanted tax results. To qualify for this loophole, all outstanding loans between you and the borrower must aggregate to $100,000 or less.
What happens to my parent's PLUS loan if my parent dies or if I die? Your parent's PLUS loan will be discharged if your parent dies or if you (the student on whose behalf your parent obtained the loan) die.
If credit is approved and an MPN has been completed, loan funds will begin to be disbursed one week before classes begin. The funds will be applied to tuition, fees, and other university charges, and any extra money will be refunded to either the student or parent, depending on what was indicated on the application.
To check the status of your PLUS loan application, contact the Federal Student Aid Information Center at 1-800-433-3243, or initiate a chat on StudentAid.gov.
Your parent PLUS loan may be discharged if you (not the child) become totally and permanently disabled, die, or (in some cases) file for bankruptcy. Your parent PLUS loan also may be discharged if the student for whom you borrowed dies.
The anticipated disbursement date is the date that a school expects to disburse Direct Loan funds. The actual disbursement date is the date the funds are made available to the borrower.
Processed: Your application was processed successfully. No further action is needed. Closed: Your FAFSA form was never submitted and can no longer be submitted because the federal FAFSA deadline passed.
The disbursement date is the date your school disburses (pays out) your Direct Loan by applying the loan funds to your school account, paying you directly, or both. Direct Loans are usually disbursed in more than one installment.