Federal Direct PLUS Loan

The Federal Direct PLUS Loan is a federal loan program where parents of dependent undergraduate students may borrow directly from the Federal Government instead of from a bank or other lending institution.  A Federal Direct PLUS loan is an unsubsidized loan that is charged interest during all periods. A parent may borrow up to the cost of attendance minus all other financial assistance.

A student is required to complete a FAFSA in order to maximize all possible grant and scholarship eligibilities and finally any subsidized loan eligibility prior to a parent borrowing a PLUS loan on their behalf.

Parent and student eligibility requirements for a Direct PLUS Loan

  • Parent must be the student's biological or adoptive parent or
  • Be the student’s stepparent, if the biological or adoptive parent has remarried at the time of application
  • Student must be a dependent of the parent. For financial aid purposes, a student is considered "dependent" if he or she is under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid (FAFSA) is submitted
  • Student must enroll in and maintain at least half-time at a school that participates in the Direct Loan Program
  • Parent must have a favorable credit history (a credit check will be done)
  • Both parent & student must be U.S. citizens or be eligible noncitizens
  • Both parent & student must not be in default on any federal education loans and/or owe an overpayment on a federal education grant

Applying for a PLUS Loan and the Electronic Master Promissory Note (eMPN)

The Application Process

  • Student completes the 2012-2013 FAFSA online at www.fafsa.gov.

  • Parent completes the 4-step PLUS Application process electronically online at www.studentloans.gov which will involve:

    • Consenting to a credit check
    • Signing an eMPN, requiring your Department of Education-issued PIN (not your child's). If you do not have a PIN, you may request one from the official PIN site
      • An eMPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department.  It also explains the terms and conditions of your loan(s)
      • If approved, your PLUS request will be provided to the schools you selected during the application process
      • The eMPN is a multi-year document. It will be valid for up to 10 years at San Diego City College and you will not have to complete and sign a new eMPN every year
  • You'll receive a disclosure statement that gives you specific information about any loan that the school plans to disburse under your MPN, including the loan amount and loan fees, and the expected loan disbursement dates and amounts

Credit Check & Endorser Alternative
  • If you are found to have an adverse credit history, you will be provided with several different options.  One of these options will allow you to obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay the loan. The endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan.
  • If you choose to obtain an endorser, he/she will need to apply for their own Department of Education-issued PIN and then visit www.studentloans.gov to endorse your PLUS loan.  You will need to provide your endorser with the loan reference number provided at the time you complete the PLUS Application process.

Interest Rates

  • The interest rate for Direct PLUS Loans is a fixed rate of 7.9%. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement.
  • The interest rate is set each school year on July 1st.

How a loan is disbursed (paid out)

  • Generally, your loan will be paid out in two disbursements payable to your parents, for example, at the beginning of each semester of the academic year.
  • Checks will be mailed directly to the parent after the eMPN is signed.  Parents must begin repayment within 60 days of receiving full disbursement of the loan.

Using the loan for education expenses

You may use the loan money you receive only to pay for your child's education expenses at the school that is giving you the loan. Education expenses include school charges such as tuition, room and board, fees, and indirect expenses such as books, supplies, equipment, dependent child care expenses, transportation, and rental or purchase of a personal computer.

Important Deadlines

December 3, 2012 - Last day to submit your loan request for the Fall 2012 semester only

December 17, 2012 - Last day of the Fall 2012 semester

May 10, 2013 - Last day to submit your loan request for the 2012-2013 academic year (Fall 2012 & Spring 2013 or Spring 2013 semester only)

May 25, 2013 - Last day of the Spring 2013 semester


This page last updated on July 5, 2012.