Parent Loans for Undergraduate Students (PLUS)
You may download the PLUS Loan Brochure in Adobe Acrobat Reader by clicking on the logo. In order to download the brochure, you will need to download the Adobe Reader free software if you do not already have it.
The Federal Direct PLUS Loan (Parent Loan for Undergraduate Students) is an affordable, low-interest loan designed to help parents pay for their child's education. This is a "government loan" meaning that it is guaranteed (or insured) by the federal government. The Federal Direct PLUS (Parent) Loan is offered to a birth parent, stepparent or an adoptive parent of a dependent student. MSU Denver offers PLUS Loans through the Direct Lending program.
If a student has applied with the Free Application for Federal Student Aid (FAFSA), a Federal Direct PLUS Loan will be offered to dependent students in conjunction with the Federal Stafford Loans. The Federal Direct PLUS Loan may be increased in lieu of the student not applying for the Federal Stafford Loan. If the student would like to decline his or her loan, he/she may submit a written statement (REJLON) to reject offered Federal Stafford Loans. If the student chooses not to submit a FAFSA and would like to receive a PLUS Loan, our office will determine eligibility with a PLADD Form.
A Federal Direct PLUS Loan will be awarded to a credit-worthy applicant (Credit Requirements.) Eligibility for PLUS Loans is not based on household income so parents at all income levels are welcome to apply. With a Federal Direct PLUS Loan you may borrow up to the entire cost of attendance (including books, room, board, fees, tuition, etc.). The school will certify the actual dollar eligibility, based on the student’s cost of attendance minus any other financial aid awarded. Federal Direct PLUS Loans not only offer a great low interest rate but the interest payments may be tax deductible. Parents are advised to consult with their tax advisor for details.
Note: The Federal Direct PLUS Loan request must be submitted to the Office of Financial Aid 3 weeks prior to the end of the term for processing. (Please see How to Apply)
For Student: The student must be enrolled in a minimum of 6 credit hours in a degree or certificate seeking program and must be making Satisfactory Academic Progress (as determined by the Office of Financial Aid). The student cannot be in default on an educational loan and cannot owe any education grant refunds.
For Parents: A parent may not be in default on an educational loan or owe any education grant refunds, and must be a natural parent, adoptive parent, legal guardian, or stepparent.
Parents must be a Citizen/Eligible Non-citizen: You must be one of the following to receive federal student aid:
• U.S. citizen
• U.S. national (includes natives of American Samoa or Swain's Island)
• U.S. permanent resident who has an I-151, I-551, or I-551C (Alien Registration Receipt Card)
If you're not in one of these categories, you must have an Arrival-Departure Record (I-94) from the U.S. Immigration and Naturalization Service (INS) showing one of the following designations in order to be eligible:
• "Refugee"
• "Asylum Granted"
• "Indefinite Parole" and/or "Humanitarian Parole"
• "Cuban-Haitian Entrant, Status Pending"
• "Conditional Entrant" (valid only if issued before April 1, 1980)
If you have only a Notice of Approval to Apply for Permanent Residence (I-171 or I-464), you are not eligible for federal student aid. If you're in the United States on an F1 or F2 student visa only, or on a J1 or J2 exchange visitor visa only, you cannot get federal student aid. Also, persons with G series visas (pertaining to international organizations) are not eligible for federal student aid.
Unlike some other education loans, the Federal Direct PLUS Loan requires that the parent borrower not have any "adverse credit." This can include, but is not limited to, a recent bankruptcy, excessive delinquencies, and certain court judgments.
This credit check will occur at the time of processing the PLUS Loan Acceptance Form. In the case of a negative credit report, you will receive written notification in the mail of the name of the credit bureau reporting and the reasons for the denial.
Note about credit denials: If the Federal Direct PLUS Loan is denied because of the credit check, the parent has the option of appealing the credit decision (if it is in error) or obtaining an endorser (similar to a cosigner). The denial is only based on one parent. The other parent has the option of also applying for the Federal Direct PLUS Loan. If our office receives a PLUS Loan credit denial, we will offer an additional Federal Direct Unsubsidized Stafford Loan to the student. If a parent chooses to obtain an endorser, the parent must work with their student in notifying our office. Regulations do not allow additional unsubsidized loans and Parent PLUS Loans within the same term. The parent and the student must determine which loan will be in their best interest.
If our office receives the Parent PLUS Loan credit denial, we will initiate the process for the student to qualify for additional Unsubsidized Stafford Loans. An email will be sent to the student via their ConnectU email account notifying them on the next step. An undergraduate student's ability to borrow through the Unsubsidized Stafford Loan Program is not as liberal as the parent's level of borrowing ability and has annual and lifetime limitations.
The additional Federal Direct UnsubsidizedStafford Loan borrowing limits are:
Freshmen $4,000
Sophomores $4,000
Juniors $5,000
Seniors $5,000
Student's Next Step to Accept Additional Unsubsidized Loan. The student must still apply for the additional Unsubsidized funds via the Federal Stafford Loan Acceptance form directly through our office. The student will have 90 days from the date of the PLUS Loan denial to accept the additional Unsubsidized Stafford Loan. After the 90 days, the Office of Financial Aid will be unable to process the additional Unsubsidized Loan and a new PLUS Loan credit check will have to be made.
• The borrower is required to complete a Master Promissory Note (MPN).
• Repayment begins 60 days after the funds are fully disbursed, and the repayment term is up to 10 years.
• PLUS Loans are the financial responsibility of the parents, not the student.
• Your repayment conditions will be determined by your loan service provider.
MSU Denver recommends that students complete the Free Application For Federal Student Aid (FAFSA) to determine if they qualify for any additional Financial Aid (including student Federal Stafford Loans). If a FAFSA is completed, the student will be contacted via his/her ConnectU email account about the next required step. Once the student has a complete financial aid file they will receive an Award Notice via their ConnectU email to notify them of their eligible awards, including the PLUS Loan. Students may complete the FAFSA at www.fafsa.ed.gov.
A FAFSA is not required for the parent to apply for a PLUS Loan. We do however encourage you to complete a FAFSA. If you choose not to complete a FAFSA, you must complete the Federal Direct PLUS Loan Acceptance Form and the PLUS Addendum Form (PLADD). The Addendum form will help the Office of Financial Aid determine your student’s Dependency requirement status. It will also provide the office with additional processing information required for the PLUS Loan.
We encourage you to borrow only what you need. If you have an award notice from the Office of Financial Aid you are not required to borrow the full amount for which you are eligible.
Step 1: Applying with the PLUS Loan Acceptance Form. Apply through the school with the Paper application, you may do so by requesting a Federal Direct PLUS Loan Acceptance form by calling (303) 556-8593. Your student may also visit us in Central Classroom 116 to pick up an application. If you are not completing the FAFSA, please attach the PLUS Addendum Form. Please complete the form in full as all questions must be answered. The form must be returned to the Office of Financial Aid at MSU Denver for processing. This application will allow the Office of Financial Aid to determine eligibility and electronically transmit the necessary data to process your Federal Direct PLUS Loan. T
Step 2: Eligibility is determined. Once we receive notice of your application, the Office of Financial Aid will determine if the student and parent meet all the eligibility requirements. The application will be processed by the Office of Financial Aid and transmitted electronically to the Loan Guarantor (Direct Loan Servicing).
Step 3: Signing the Master Promissory Note (MPN). Sign the MPN online at https://studentloans.gov/myDirectLoan/index.action. A Master Promissory Note is the contract that the borrower must sign before the loan can be disbursed. This contract states that the borrower agrees to repay the loan and accepts the terms and conditions of the loan. (see Required Forms for additional information)
Step 4: Disbursement of the funds. Once all of the necessary forms are completed the funds will be disbursed to the school. Your loan funds will be disbursed in two equal disbursements for fall/spring requests. For a one-term loan, it will be in one disbursement. The funds will be applied to your student’s Tuition and Fee charges. Any excess funds will be issued in a refund to the student or as a paper check mailed to the parent depending on the method selected at the time of application.
Parent Loan Acceptance Form must be submitted to the Office of Financial Aid. It is available for download by clicking here: Parent Loan Acceptance Form. If the student chooses not to submit a FAFSA and would like to receive a PLUS Loan, our office will determine eligibility with a PLADD Form.
Federal Direct PLUS Mater Promissory Note (MPN): The binding, legal document you sign when you get a student loan. It lists the conditions under which you are borrowing and the terms under which you agree to pay back the loan. It will include information about your interest rate and about deferment and cancellation provisions. It's very important to read and save this document because you will need to refer to it later when you begin repaying your loan. This form will be submitted to our Guarantor (Direct Loan Servicing). There is now an online MPN that may be completed with Electronic Signature via https://studentloans.gov/myDirectLoan/index.action.
• A Federal Parent Loan allows parents to borrow the total cost of undergraduate education including tuition, room and board, supplies, lab expenses, and travel less any other aid.
• These parent loans are non-need based. PLUS Loans are based on your credit rating, and the rating average that is considered "good."
•Federal Direct PLUS Loans have a fixed interest rate of 7.9%.
• Parent loans require no collateral (like other types of loans - including home equity)
• Interest may be tax deductible.
• Eligibility is not based on need by FAFSA regulations.
• Repayment may be extended up to 10 years.
• Payments have no pre-payment penalty.
• By using Automatic Debit (automatic payment) customers get a .25 percentage point interest-rate cut.
Borrowing Limits and Loan Periods
Borrowing Limits: For each undergraduate child, parents may borrow up to the student's cost of attendance minus all other financial aid awarded. The cost of attendance may include tuition and fees, room and board, books and supplies, transportation, and miscellaneous expenses. The student's school will determine and certify this amount.
Once the loan is approved, the funds will be sent to the school. Loans are made co-payable to both the parent and the school, with any excess funds being issued in a refund to the student.
Example for students with an At Home/Resident budget:
Borrowing Amount Example
Cost of Attendance $10,050
Other Financial Aid Awarded - $5,500
Maximum You May Borrow = $4,550
Example for students with an Away from Home/Resident budget:
Borrowing Amount Example
Cost of Attendance $13,835
Other Financial Aid Awarded - $5,500
Maximum You May Borrow = $8,335
Loan Periods: The Office of Financial Aid has specific loan periods for which a parent may request loan funds. The disbursements are disbursed based on the first day of courses, or as soon as the parent applies after the term has begun.
The following terms are for the 2009 – 2010 school year:
Fall/Spring: August 09 – May 10, two disbursements (Typically: August and January)
Fall Only: August 09 – December 09, one disbursement (Typically: August)
Spring Only: January 10 – May 10, one disbursement (Typically: January)
Summer Only: May 10 – August 10, one disbursement (Typically: May)
Federal Direct PLUS Loans have a fixed interest rate of 7.9%.
The U.S. Department of Education charges an origination fee of 3.00% of the original loan amount, and the loan guarantor (College Assist) charges a guarantee fee of 1%.
Federal Direct PLUS Loans require a Master Promissory Note (MPN) to be completed. With the serial feature of the MPN, you now only have to sign one MPN for all of your loans while attending MSU Denver or schools that use Direct Loan Servicing as a Guarantor. The MPN states all Borrower Responsibilities regarding paying back your parent loan. You must notify Direct Loan Servicing of any and all of the following: 1) change in address, 2) name change, 3) if you drop below at least half-time enrollment status, 4) if you transfer to another school, and 5) when you graduate.
The MPN requires verification of contact information and two personal references. If you do not sign your MPN, your loan will not be guaranteed and the loan request will be automatically cancelled after 90 days by or cancelled with a written statement to our office.
Repayment - usually begins within 60 days of full disbursement. Under the Standard Repayment Plan, borrowers will pay a fixed amount each month for up to 10 years. Choosing the Extended Repayment Plan will lower the monthly payment and extend the repayment period. Parents who choose the Extended Repayment will pay more interest over the life of the loan. Under both of these plans, the monthly payment will be at least $50.
Loan term for borrowers making minimum monthly payments ($50) will be less than 120 payments. Exact length of the term will vary depending on the interest rate and the total loan amount. The minimum monthly payment will be at least $50. Monthly payment examples are only estimates and do not account for interest that may accrue during deferment. Actual monthly payment amounts may vary.
Under certain circumstances, parents may also qualify for Graduated Repayment. This plan allows borrowers to make lower monthly payments that gradually increase. These reduced payments will be equal to the amount of interest that accrues between monthly payments or half of what the borrower would pay under Standard Repayment -- whichever is greater.
Deferment - allows you to temporarily postpone payments on your loan. You can't receive a deferment if your loan is in default. If you are temporarily unable to meet your repayment schedule, but are not eligible for a deferment, you may receive forbearance for a limited and specified period. You may have to provide documentation to support your request. You must continue making scheduled payments until you receive notification that the deferment or forbearance has been granted.
Forbearance - During forbearance, your payments are postponed or reduced. Whether your loans are subsidized or unsubsidized, you will be charged interest. If you don't pay the interest as it accrues, it will be capitalized. You may have to provide documentation to support your request for forbearance or deferment. You must continue making scheduled payments until you receive notification that the deferment or forbearance has been granted.
For example, you may be granted forbearance if you are:
• unable to pay due to poor health or other unforeseen personal problems.
• serving in a medical or dental internship or residency.
• serving in a position under the National Community Service Trust Act of 1993 (forbearance may be granted for this reason for a Direct or FFELP Stafford Loan, but not for a Direct or FFELP PLUS Loan).
• obligated to make payments on certain federal student loans that are equal to or greater than 20 percent of your monthly gross income.
If a Parent wants to cancel a loan that has been submitted or processed they must submit a written statement to the office regarding this. The statement must include the student's name, and 900 school ID number. If your loan has already disbursed and you have received a check and want to cancel your loan, you must return the check with a written statement requesting cancellation of your loan and a legible copy of your parent's driver license. If you have cashed the check and still wish to cancel the loan, you must contact the Loan Department at the Office of Financial Aid to learn how to cancel this loan. A written statement requesting cancellation of your loan will still be required. A representative from the Loan Department at the Office of Financial can let you know how to make the payment back to the school.
