Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school.
Direct Subsidized Loans are available only to undergraduate students who have financial need. Direct Unsubsidized Loans are available to both undergraduates and graduate or professional degree students. You are not required to show financial need to receive a Direct Unsubsidized Loan.
A Direct PLUS Loan made to you as a parent cannot be transferred to your child. You are responsible for repaying the loan.
The status of a Direct PLUS Loan can be found by either logging in to your account or by contacting your student loan servicer. Not sure who your loan servicer is? Log in to StudentAid.gov to view your servicer information.
The maximum Direct PLUS Loan amount that can be borrowed is the cost of attendance at your school minus any other financial assistance received.
What Are Some Reasons to Avoid PLUS Loans? First, PLUS loans have no automatic grace period. Then there's the fact they aren't eligible for most IDR plans. Then, borrowing too much is easy to do, and finally, they're nearly impossible to get out of, even in bankruptcy.
Can the loan be transferred to the student? No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent borrower, are legally responsible for repaying the loan.
The correct answer is FHA. FHA stands for Federal Housing Administration, which makes direct loans to qualified borrowers. Fannie Mae is a government-sponsored enterprise that buys mortgages on the secondary market, but it does not make loans directly.
If a student's parents are divorced, both the custodial and non-custodial parent may borrow a PLUS loan for their dependent, undergraduate student. A step-parent may only borrow a PLUS loan if they are married to the custodial parent and their financial information was reported on the FAFSA.
Direct Subsidized/Unsubsidized Loans have a lower fixed interest rate (6.8%) than Direct PLUS Loans (7.9%), and no interest is charged on Direct Subsidized Loans while you are in school at least half-time or during grace and deferment periods. Interest is charged on Direct PLUS Loans during all periods.
Student must be under age 24, unmarried, and have no legal dependents at the time of submitting the FAFSA (exceptions apply). Student must be enrolled at least half time.
Credit requirements for a Parent PLUS Loan
For five years before your credit is pulled: You can't have a loan default, a discharge of debts in bankruptcy, foreclosure, repossession, tax lien, wage garnishment, or a write-off of a federal student aid debt.
With federal PLUS loans, the government will check for an adverse credit history, although there is still no minimum credit score requirement. Those who have a less-than-perfect credit history, however, may need to meet additional requirements to get approved.
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.
Approved USDA loan lenders typically require a minimum credit score of at least 620 to get a USDA home loan. However, the USDA doesn't have a minimum credit score, so borrowers with scores below 620 may still be eligible for a USDA-backed mortgage.
A direct lender is a financial institution or private entity that actually provides the loan for a mortgage. Direct lenders may be banks and other financial institutions. Some direct lenders are private companies that deal specifically with financing mortgage loans for the general public—many of which operate online.
To be eligible for a Direct Subsidized Loan, you must be an undergraduate student with financial need. To apply for any Direct Loan, you must first complete and submit the Free Application for Federal Student Aid (FAFSA®) form.
The U.S. Department of Education makes Direct PLUS Loans to eligible parents through schools participating in the Direct Loan Program.
In addition, the graduate/professional student, the parent or the dependent student must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs.
Like Direct Subsidized and Unsubsidized Loans, these loans have a fixed interest rate. Note that Direct PLUS loans are unsubsidized, meaning that interest accrues throughout the life of the loan, including while the student is enrolled in school.
The typical repayment period for a Direct PLUS Loan is 10 to 25 years. This loan repayment option allows borrowers to have a longer time frame to repay their loan, making monthly payments more manageable.