Parents of undergraduate students may borrow a Federal Direct Parent Loan for Undergraduate Students (PLUS) to help cover educational expenses their student may incur while attending college. The 2020-21 interest rate for PLUS loans is fixed at 5.3 percent. An origination fee is deducted from the disbursed amount at 4.236 percent when disbursed prior to October 1, 2020 and at 4.228 percent when disbursed on or after October 1, 2020. Parents can borrow up to the Cost of Attendance less any other financial aid (the total of all grants, scholarships and other loans) awarded to the student. Parents may continue to borrow each year but must reapply and complete a new credit check annually. Please see the Direct PLUS Loan Basics for Parents publication from The Department of Education.
Who is Eligible to Borrow a Parent PLUS Loan?
In order to borrow a PLUS loan, a parent must be:
- A US citizen, permanent resident or other eligible non-citizen.
- Be the biological or adoptive parent of the students. Step-parents can be eligible to borrow a plus loan only if their income is reported on the FAFSA.
- Not in default on a federal student loan or have adverse credit history.
How to Apply
Parents interested in borrowing a Federal Direct PLUS Loan will complete the online application process and Master Promissory Note (MPN) through the Department of Education at www.studentaid.gov. An instant credit check is a part of this application process. A Federal Student Aid (FSA) ID is necessary to complete the process. Go to www.fsaid.ed.gov to create your FSA ID.
Apply for a Parent PLUS Loan for the Current School Year
- Go to studentaid.gov Click on the “Log In” button.
- Sign in using your FSA ID
- Select “APPLY FOR AID” then select “Apply for a Parent PLUS Loan”
- Please note if more than one parent wishes to borrow PLUS loan funds, each parent must apply for their own FSA ID, complete their own PLUS application and MPN.
Determining a Loan Amount
You will be given three options to indicate how much you would like to borrow when completing the PLUS application:
- I want to borrow the maximum PLUS loan amount for which I am eligible.
Choosing this option, USD will process your PLUS loan for the maximum amount possible (Cost of attendance less other financial aid) for the academic year.
- I would like to specify an amount.
By selecting this option, you will enter in the dollar amount you would like to borrow. USD will process your PLUS loan for this amount.
- I do not know the amount.
By selecting this option, USD will hold your PLUS application until you contact us, in writing, to tell us the amount you wish to borrow.
You can send all requests to email@example.com.
PLUS loan funds automatically pay any charges on your student's account. If there are any funds remaining, the credit balance will be issued as a refund. USD will automatically send this refund to the student unless notified in writing. The parent borrower must also indicate who will receive the refund during the application process.
- Student: This option allows the student to receive the refund.
- Me: This option allows the parent borrower to receive the refund.
If your credit check is denied, there are several options which can be pursued:
- Parents can choose "I want to appeal the decision." This allows a parent to appeal the credit decision with the Department of Education.
- Parents can choose "I want to obtain an Endorser (cosigner)." The Department of Education will provide you with information for reapplying with an Endorser (cosigner).
- Parents can choose "I do not wish to pursue a PLUS loan at this time." If selecting this option, the Office of Financial Aid will automatically award an additional Unsubsidized Direct Loan in the student's name based on their grade level:
- Freshmen (0-29 credit hours) and Sophomores (30-59 credit hours) will receive an additional $4,000.
- Juniors (60-89 credit hours) and Seniors (90+ credit hours) will receive an additional $5,000.
If the credit check is approved, the parent completing the application must complete a Parent PLUS Master Promissory Note (MPN).
Complete Federal Direct PLUS Master Promissory Note
Go to www.studentaid.gov Click on the “Log In” button. Sign in using your information and FSA ID.
Select “COMPLETE AID PROCESS”
Select "MPN for Parents"
The SAME parent must be listed on both the initial application (credit check) and Master Promissory Note.
The process is not complete until you see a "Congratulations" message.
Please print confirmations for your personal records. The University of South Dakota will be notified electronically within 24-48 hours once you have completed the process.
Parent PLUS loans go into repayment 60 days after the loan fully disburses; however, parents may also opt to defer payments for up to four years while their student is enrolled at least half-time. Please note that interest will accrue and capitalize if you choose to defer payments. Parents can choose to defer payments as part of the application process. If you choose to defer repayment after the application process, please contact the loan servicer for more information.
For more information about the Parent PLUS Loan, please visit the Federal Student Aid website.