For: All parents of dependent undergraduates regardless of income. Qualification is based solely on good credit. You must be the student’s biological or adoptive parent or the student’s stepparent, if the biological or adoptive parent has remarried at the time of application. There are no debt-to-income ratio guidelines or employment verification requirements.
Loan Amounts: Parents may borrow up to the total education cost for the year, minus any other financial aid that the student is receiving. The total education cost can include tuition and fees, room and board, books and supplies, transportation, and living allowance.
Federal Parent PLUS loans disbursed on or after July 1, 2017 through June 30, 2018 have a fixed interest rate at 7.00%, with interest beginning to accrue upon disbursement until it is repaid in full.
Federal Parent PLUS loans disbursed on or after July 1, 2018 through June 30, 2019 have a fixed interest rate at 7.60%, with interest beginning to accrue upon disbursement until it is paid in full.
The interest rate cap is 10.5%.
Federal Direct Parent PLUS loans first disbursed on or after October 1, 2017 and before October 1, 2018 have a 4.264% loan fee.
Federal Direct Parent Plus loans first disbursed on or after October 1, 2018 and before October 1, 2019 have a 4.248% loan fee.
Loan fees are retained by the federal government to reduce the cost of supporting these low interest loans.
- The student completes the Free Application for Federal Student Aid (FAFSA) at http://www.fafsa.gov/ if one has not been submitted for the current year.
- The parent completes the Parent PLUS Loan Request and Parent PLUS Master Promissory Note (MPN), and the student completes undergraduate-level Direct Loan Entrance Counseling. All forms are available online at https://studentloans.gov/myDirectLoan/index.action.
- The Office of Financial Aid receives the Direct Parent PLUS MPN and the approved/endorsed Parent PLUS Loan Record from the U.S. Department of Education (ED) and adds the Parent PLUS award to myFinAid.
- The student goes to myFinAid to accept, reduce, or decline the Parent PLUS award amount.
- If the student is registered and all official transcripts are on file with the Office of Admissions, the Office of Financial Aid sends a Direct Parent PLUS Loan origination record to ED.
The Department of Education is responsible for all Parent PLUS loan credit decisions. Parent PLUS loan borrowers are required to pass a simplified credit check, meaning that the U.S. Department of Education is not looking for a certain credit score or for an extensive credit history, but simply the absence of an adverse credit history. Students can view the status of their parents’ application by logging in to https://studentloans.gov/myDirectLoan/index.action or by calling Federal Direct Loans at 1-800-557-7394. Effective March 29th, 2015 credit decisions are held for 180 days.
The following will cause a Parent PLUS Loan to be denied:
- An open account currently 90 days or more delinquent.
- A collection or charged off account (open or closed) in the past two years.
- Default in the past five years.
- Defaulted loan that has been claim paid.
- Chapter 7, 11, or 12 bankruptcies (Chapter 13 is OK) discharged in the past five years.
- Foreclosure in the past five years.
- Foreclosure proceedings started.
- Deed in lieu of foreclosure in the past five years.
- Lease or contract terminated by default.
- Repossession of collateral in the past five years.
- Tax lien (county, state, or federal) in the past five years.
- Wage garnishment in the past five years.
- Voluntary surrender of personal property to avoid repossession in the past five years.
- Charge-Off/Write-off of Title IV debt in the past five years.
Parents will receive an immediate approval or denial of their application upon electronic completion as well as the loan reference number, which is needed if the parent wishes to pursue an endorser. The Walden University Office of Financial Aid will be notified electronically of the credit decision only if the application was completed electronically. Applications are not approved or denied based on the dollar amount requested; therefore, parents should not complete additional applications once a denial is rendered by the Department of Education. Once the loan application is denied, the parent must either find an endorser or appeal the credit decision by documenting extenuating circumstances.
The Office of Financial Aid has no control over or influence on the credit decision rendered by the Department of Education. Any and all correspondence regarding credit appeals and endorsers must be sent to the Department of Education.
Approval for the Parent PLUS loan is loan specific. It is possible to be approved for one loan and denied at a later date for a new loan. Denied parents still have two options to obtain the Parent PLUS Loan:
- Review their credit report (which can be done for free at http://www.annualcreditreport.com/) for possible errors and correct them before appealing directly to the Department of Education.
- Find a creditworthy endorser to co-sign for the loan. This endorser will then be responsible for the loan should the parent default on it at any point during the life of the loan.
Endorsing a Parent PLUS Loan
Steps to be taken by the endorser (these must be completed electronically; paper addenda will not be accepted):
- Create an FSA ID at https://fsaid.ed.gov. Endorsers must log in using their own FSA ID to complete an endorser addendum.
- Sign on to https://studentloans.gov/myDirectLoan/index.action. This is the website where the endorser electronically co-signs the loan.
- Click on” Complete Endorser Addendum” (under $$Obtain Aid at bottom of the webpage).
- Enter the Endorser Code or an Award Identification Number (provided by parent borrower) and follow the instructions.
- Accept or reduce the Parent PLUS Loan amount. This will need to be done prior to the record being sent for certification.
Usually done in three equal amounts at the beginning of each semester/quarter and sent directly to the university. A federal loan fee may be deducted from the proceeds.
Federal Direct Parent PLUS loan repayment normally begins within 60 calendar days after the loan has been fully disbursed. In certain circumstances, parents may elect to repay the loan on a graduated repayment schedule, making interest-only payments (the minimum is based on the term of the loan and must be at least $50 per month) for a portion of the repayment term.
Do you have questions about financial aid? If you haven’t yet applied to Walden, please contact an enrollment advisor at 855-646-5286 in the United States. If you are a current student, please contact a financial aid advisor at email@example.com or call 1-800-WALDENU (1-800-925-3368).