Parent PLUS Loan Basics

Click Here to apply for a Parent PLUS Loan

Before beginning the application process, please read the important information below.

The Parent PLUS Loan is a federal Direct Loan made in the parent’s name for educational expenses of his or her dependent child enrolled at least six hours at The University of Alabama. Persons eligible to apply for the Parent PLUS loan are: the student’s biological parents, adoptive parents, and, in some cases, stepparents. Legal guardians and non-adoptive grandparents or other relatives are not eligible. Other qualifications must be met and are described below.

Before considering a parent’s application for a Parent PLUS Loan, The University of Alabama must receive and verify the results of the Free Application for Federal Student Aid (FAFSA) submitted by the student for whom the Parent PLUS Loan is being requested. The student is not required to accept Federal Direct Subsidized and/or Unsubsidized Loans offered on the basis of FAFSA results.

All loans are subject to Cost of Attendance limitations. No awards may be made to a student who has reached the limit of his/her financial aid cost of attendance. If additional resources are received by the student after loans have been awarded, the loans may be reduced and funds returned to the U.S. Department of Education.

If approved for the Parent PLUS Loan, the parent borrower must sign a Parent PLUS Master Promissory Note at studentaid.gov, using his or her own Federal FSA ID (if he or she has not already done so).

If credit for the Parent PLUS Loan is denied, the parent borrower may seek an override of the credit decision either through an appeal, or obtain paperwork for an eligible endorser, by contacting Federal Student Aid directly at 1-800-557-7394. Also, the endorser may obtain the reference number for the loan from the Student Financial Aid Office, and, using his or her own Federal FSA ID (not the parent borrower’s), complete the Endorser Addendum available at studentaid.gov. Each time an endorser is used to obtain a reversal of credit denial, a new Master Promissory Note (MPN) must be signed by the parent borrower at studentaid.gov.

If informed that a credit override will be sought, Student Financial Aid will originate a Parent PLUS Loan in order to expedite the process of obtaining a credit override. This loan origination does not guarantee the eventual acceptance and disbursement of the loan.

A student may not be awarded for all semesters for which the parent has applied. In this case, the PLUS application will be reviewed again for subsequent semesters, which may require another credit check. For additional details, including interest rates and repayment information, please visit the Federal Student Aid website for the most complete information.

Other Parent PLUS loan information

Eligibility:

You must be the biological or adoptive parent (or, in some cases, the stepparent) of the student. A stepparent and their financial information must be included in FAFSA application.
Your child must be a dependent student who is enrolled at least six hours at The University of Alabama. Generally, your child is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional-degree student, or a ward of the court.
In addition, you and your child must be U.S. citizens or eligible non-citizens, 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.
The student must meet The University of Alabama’s Satisfactory Academic Progress Standard as defined in the Undergraduate Catalog.

Credit Worthiness:

To be eligible for the Federal Direct PLUS Loan, the applicant cannot have adverse credit, which can include: (1) 90 days or more delinquency on the repayment of any debt; or (2) the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a Title IV debt during the last five years.

Credit Check:

The Department of Education performs a credit check and notifies our office with a loan approval or denial. The University of Alabama will not see any information contained in your credit report.
Any previous credit decision (approval or denial) has no bearing on the credit decision made this year.
If you request a loan for more than one loan period, your credit record may be accessed more than one time.

Interest Rates:

For current information on Parent PLUS interest rates, visit studentaid.gov.

Approved Loans:

An approval notification will be sent to the borrower from the Federal Student Aid office.
If you have not already completed the Federal Direct PLUS Master Promissory Note (MPN) for this student, you must do so at studentaid.gov.

Repayment:

Repayment of the Federal Direct PLUS Loan begins within 60 days after the final loan disbursement, unless the parent borrower is eligible for a deferment. For information about repayment terms/rates, deferment, and other terms of the PLUS Loan, contact: Higher Education Loan Center at 1-800-848-0979, or at studentaid.gov.

Denied Loans:

If denied, you will be notified by Federal Student Aid. If you appeal your credit denial or seek an endorser, you may also be required to complete federal PLUS loan counseling. Federal Student Aid will notify you if you need to complete the counseling requirement.

If credit for the Parent PLUS Loan is denied and the parent borrower does NOT state that a credit override will be sought, an additional Unsubsidized Loan will be offered to the student, subject to eligibility.

CREDIT OVERRIDES — APPEAL: By contacting Federal Student Aid at 1-800-557-7394, the parent borrower may seek an override of the credit decision through an appeal, either disputing the credit report, or clearing up “adverse” items.

CREDIT OVERRIDES — ENDORSER: Federal Student Aid will provide the parent borrower with an endorser code, or the parent borrower may contact Student Financial Aid to obtain the Award Identification Number. The endorser, using his or her own Federal FSA ID (not the parent borrower’s), may then complete the Endorser Addendum available at studentaid.gov. Each time an endorser is used to obtain a reversal of credit denial, a new Master Promissory Note (MPN) must be signed by the parent borrower at studentaid.gov. Alternatively, the parent borrower may obtain paperwork for an eligible endorser by contacting Federal Student Aid at 1-800-557-7394.

Rights:

The information on your application may be disclosed to third parties as authorized under routine uses in the Privacy Act notices called “Title IV Program Files” (originally published on April 12, 1994, Federal Register, Vol. 59, p. 17351) and “National Student Loan Data System” (originally published on December 20, 1994, Federal Register, Vol. 59, p. 65532). Thus, this information may be disclosed to parties that The U.S. Department of Education authorizes to assist them in administering the Federal Student Aid programs, including contractors that are required to maintain safeguards under the Privacy Act. Disclosures may also be made for verification of information, determination of eligibility, enforcement of conditions of the loan or grant, debt collection, and the prevention of fraud, waste, and abuse and these disclosures may be made through computer matching programs with other Federal agencies.

Annual Loan Limit:

A Parent PLUS borrower may borrow a maximum of the student’s cost of attendance minus all other aid.