Parent PLUS Loans are federal Direct Loans for eligible parents to help cover the remaining out-of-pocket expenses associated with their student's education. Out-of-pocket expenses are the amounts on the student's bill not covered by federal, state, and institutional aid or scholarship resources.
Parent PLUS Loans are unsubsidized loans, meaning interest accrues from disbursement through the life of the loan, including while the student is enrolled.
Parents can apply for a Parent PLUS Loan if their student meets the following requirements:
- Is a dependent undergraduate student in a degree-seeking program
- Is enrolled in classes at least half-time (six credit hours) and
- Is meeting financial aid satisfactory academic progress (SAP)
- Has a completed and valid Free Application for Federal Student Aid (FAFSA) for the current aid year on file with Salem State University
A parent cannot transfer their loan to their children. The parent is the borrower and is legally responsible for repaying the loan.
Parent PLUS Loan Changes Due to the One Big Beautiful Act (OBBBA)
Enacted in July 2025, the One Big Beautiful Bill Act (OBBB) introduced major reforms to federal student loan programs as part of broader fiscal policy changes.
Changes from the legislation, set to take effect on July 1, 2026, will affect federal student loans starting with the 2026-2027 aid year.
The OBBBA updates the borrowing limits for parents and the payment options available to parent borrowers.
Direct Parent PLUS Loans
Credit Check
A credit check will be conducted at the time of application. The applicant must not have an adverse credit history. The U.S. Department of Education determines whether the applicant meets the credit history criteria. Salem State is notified only of the credit decision and has no input into it. For more information, please visit Parent PLUS Loans and Adverse Credit.
If the parent applying for the Parent PLUS Loan has placed a security freeze on their credit file, they must lift the freeze with each credit bureau before beginning the PLUS application.
The Department of Education will not process the application if a security freeze is active on the parent’s credit report.
Interest Rate and Loan Fees
Interest rates for Direct PLUS Loans are fixed for the life of the loan. In addition to interest, a loan fee is applied to all Direct PLUS Loans.
The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement.
As a result, the disbursed amount (the amount paid to your student’s account) will be less than the amount borrowed. The loan fee should be considered when deciding how much to apply for.
Loan fees cannot be waived and must be deducted in accordance with federal law. Borrowers are responsible for repaying the entire loan amount, not just the amount the student receives.
For more information on interest rates and loan fees, please visit the Interest Rates and Fees for Federal Student Loans page.
It is the students' and their families' personal choice regarding who should apply for a Parent PLUS Loan.
To apply for a Parent PLUS Loan, the borrower must:
- Be the biological or adoptive parent (or, in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time at Salem State.
- A stepparent may borrow a PLUS Loan only if they are married to the custodial parent and their financial information was reported on the FAFSA of record.
- If a student's parent(s) are divorced, both the custodial and non-custodial parent may borrow a PLUS loan for their dependent undergraduate student.
- Grandparents (unless they have legally adopted the dependent student) and legal guardians are not eligible for Parent PLUS loans, even if they have had primary responsibility for raising the student.
- Not have an adverse credit history.
- The borrower and student must be U.S. citizens or eligible noncitizens
- Not be in default on any federal education loan
- Not owe an overpayment on a federal education grant
- Meet the general eligibility requirements for federal student aid
To apply for a Parent PLUS Loan, complete the Direct PLUS Loan Application for Parents at studentaid.gov. Parents will need their Federal Student Aid ID (FSA ID) and password to complete the application.
To apply, parents can fill out the Direct PLUS Loan Application for Parents at studentaid.gov. They will need their Federal Student Aid ID (FSA ID) and password to begin the application.
Parents should apply for the term or terms (enrollment period) that their student is attending. If the student is enrolled for the entire academic year (Fall and Spring terms), parents should apply for the full academic year. Alternatively, parents can choose to apply for just one term if they prefer.
If your student will be enrolled in Summer term classes, parents must apply for a separate loan specifically for the Summer term. Students need to submit the Summer Financial Aid Application before they will be packaged for any Summer aid.
For the 2025-2026 Aid Year
There is no borrowing limit for Parent PLUS Loans; however, the maximum amount a parent may borrow is the estimated cost of attendance minus any other financial aid received.
Estimated COA - Other Financial Aid Received = Amount of PLUS Loan.
- For example, if the estimated cost of attendance is $22,000 and the student will receive $10,000 in other financial aid (including Federal Direct Loans, grants, or scholarships), a parent may borrow up to $12,000 for the academic year.
Parents may apply for an amount exceeding the estimated cost of attendance, but Salem State cannot award a loan in excess of that amount.
For the 2026-2027 Aid Year
Beginning July 1, 2026, Parent PLUS Loan borrowers may borrow up to $20,000 annually, with an aggregate borrowing limit of $65,000 per dependent student, regardless of any amounts repaid, forgiven, canceled, or otherwise discharged.
If a Parent PLUS Loan borrower needs more than the annual borrowing limit or reaches the aggregate limit before the student graduates, there are additional funding options, including external scholarships, an interest-free payment plan, and private loans.
Current Parent PLUS Loan Borrowers
New federal borrowing limits cap the Parent PLUS Loan at $20,000 annually and $65,000 in total per dependent student, but the law allows a time-limited exception to those limits for currently enrolled students.
For Parent PLUS Loan borrowers not to be subject to the new loan limits:
- The student must remain continuously enrolled in the same program of study at the same institution as they were enrolled as of June 30, 2026, AND
- Either:
- The parent borrower must have had a Parent PLUS Loan disbursed for that same program before July 1, 2026, OR
- The student must have had a Direct Loan (subsidized or unsubsidized) disbursed for that same program before July 1, 2026.
- If the above requirements are met, the new Parent PLUS Loan limits do not apply while the student is completing their program for up to 3 years, provided the student remains continuously enrolled (i.e., does not withdraw or otherwise cease enrollment during scheduled breaks or non-required terms, such as Summer).
- Parents of current students who do not currently meet these criteria can still qualify for this limited exception to the new loan limits if:
- The parent borrows a Parent PLUS Loan prior to July 1, 2026, OR
- The student borrows a Direct Loan (subsidized or unsubsidized) prior to July 1, 2026.
What Happens When Students No Longer Qualify For the Limited Exception?
After three academic years, or earlier if the student withdraws, otherwise ceases enrollment at their current school, or completes their program of study, Parent PLUS Loan borrowers are subject to the new $20,000 annual and $65,000 aggregate loan limits per dependent student.
New Parent PLUS Loan Borrowers
Importance of Planning Accordingly
The new aggregate limit of $65,000 means that borrowing the annual maximum for a four-year undergraduate program will cause parents to reach the aggregate limit before the student completes their degree, leaving them without further access to the Parent PLUS Loan.
Planning Annual PLUS Borrowing To Ensure Continued Access
On the Parent PLUS Loan application, parents should select the maximum amount option only if they intend to borrow the full $20,000 for the year. To ensure adequate Parent PLUS Loan eligibility throughout the student’s undergraduate program, parents should request a lower amount on the application. For example, request $16,250 in total (aggregate) eligibility per year, split equally over a four-year program.
Tips for Borrowing
We strongly recommend that students add their parent(s) as Authorized Users to their TouchNet account. Authorized Users can view account activity, the current bill, anticipated aid, and anticipated refunds to help families determine how much to borrow.
For information on tuition and fees, billing, and payment options, please visit the following:
- Understanding Tuition and Fees
- Tuition and Fees
- How To: View My Bill
- How To: Understand My Bill
- Pay Your Bill
- Student Accounts FAQs
- Tuition Insurance
- Refund Policy
- Financial Aid Information for Parents and Families
- Parent Guide
Remember to include the loan fee in the amount you apply for!
Parents approved for a Parent PLUS Loan must sign a Direct PLUS Loan Master Promissory Note (MPN) before any loan funds are disbursed to your student's account. The MPN details the loan’s terms and conditions and is a legally binding agreement to repay all Parent PLUS Loans received under the Direct PLUS Loan MPN.
Parents who borrow a Parent PLUS Loan for multiple children must complete a separate Direct PLUS MPN for each child's loan.
The Department of Education will assign a loan servicer. The loan servicer will send updates on the loan status and repayment information. The loan servicer will notify the borrower when the first payment is due.
For more information on loan servicers and current repayment plans available, please visit:
When financial aid funds are disbursed, any outstanding balances owed to the university are paid first. If there are any excess funds from your Parent PLUS Loan after the balance has been paid, a refund will be issued. Families may keep their refund or send the extra funds to their loan servicer as a payment toward their Parent PLUS Loan.
For any questions regarding refunds, please contact the Student Navigation Center.
There are several options for moving forward if a borrower is denied a Parent PLUS Loan.
1) Appeal the Credit Decision
The parent may appeal the credit decision to the U.S. Department of Education if they believe the information that led to the adverse credit decision is incorrect or if there are extenuating circumstances related to the adverse credit history. The borrower must provide, to the satisfaction of the U.S. Department of Education, documentation of the extenuating circumstances related to their adverse credit history.
2) Obtain An Endorser
Parents who choose not to appeal the credit decision can obtain an endorser (similar to a cosigner) who has no negative credit history. The endorser agrees to repay the Parent PLUS loan if the borrower cannot do so. The endorser cannot be the child for whom you are borrowing.
Borrowers will be issued an Endorser Code, also known as an Award Identification Number, which they must give to their endorser. The endorser must then complete the Endorser Addendum using their FSA ID and password at studentaid.gov.
The endorser will need the borrower's last name and the Endorser Code to complete the Endorser Addendum.
Salem State will not add an endorsed Parent PLUS Loan to the student's account until we receive the completed Endorser Addendum, the Direct PLUS Loan Master Promissory Note, and Credit Counseling from the Department of Education.
With either option, the borrower must complete a Direct PLUS Loan Master Promissory Note and Credit Counseling.
3) PLUS Loan Denial Funds
Students whose parents are denied a PLUS loan and who choose not to appeal the credit decision or secure an endorser may qualify for extra Direct Unsubsidized Loan funds.
- First and Second-year students may receive up to an additional $4,000 in Direct Unsubsidized Loan funds.
- Third-year students and beyond may receive up to an additional $5,000 in Direct Unsubsidized Loan funds.
Additional unsubsidized loan funds will automatically be added to a student's existing unsubsidized loan once Salem State receives the Department of Education's loan denial.
Parents can request an adjustment to their Parent PLUS Loan by submitting a written statement that includes the following information:
- Borrower's Name
- Date
- Student's Name and Salem State ID Number
- The change they want to make to their loan
- Examples: Cancel the loan entirely or for one term only, or reduce the loan amount.
- If the borrower requests a change to the loan amount, include the reduction amount and the new total loan amount.
- Amounts must be requested in whole dollars; cents are not permitted.
- Examples: Cancel the loan entirely or for one term only, or reduce the loan amount.
- The term during which the adjustment should be made.
- Examples: Fall/Spring, Fall Only, Spring Only, Summer Only
The statement must be signed with a wet, physical signature. It can be emailed to navcenter@salemstate.edu or sent via secure fax to 978-542-6876.
The adjustment request must come from the parent, as they are the legal borrower of the Parent PLUS Loan. Changes will be made to the Parent PLUS Loan once a statement is received from the parent/borrower.
Before requesting an adjustment, review your student's account to estimate what your student will need to cover their balance. Be sure to include expenses like books and personal costs in your calculations. Any changes to your loan could result in a remaining balance on your student's account, for which you will be responsible. If your student receives a refund with their current aid and the loan amount is reduced, the refund might be affected.
The Department of Education will assign a loan servicer. The loan servicer will send updates on the loan status and repayment information. The loan servicer will notify the borrower when the first payment is due.
For more information on loan servicers and current repayment plans available, please visit:
Families can review the Loan Simulator and current repayment plans at studentaid.gov to determine which repayment plan they may be eligible for and to estimate their monthly and overall payments.
Deferment
Parents can request a deferment when applying for a PLUS Loan. During the deferment period, borrowers do not have to make payments while the student is enrolled at least half-time and for six months after the student graduates, leaves school, or drops below half-time enrollment. Borrowers can also contact their loan servicer to ask for a deferment if they didn't request one during the application process.
During any period of deferment, interest will accrue on the loan. Borrowers can pay accrued interest or have it capitalized (added to the principal balance) when they begin making payments on the loan.
If a deferment is not requested, borrowers are expected to begin making payments after the loan is fully disbursed to the student's account.
Changes in Repayment Plans Due to OBBBA
Any federal Parent PLUS Loans borrowed on or after July 1, 2026 (including federal consolidation loans that include Parent PLUS Loans) will only be repaid under a new, single fixed repayment plan.
For Parent PLUS Loans taken out on or after July 1, 2026, the only repayment plan available will be a new tiered standard repayment plan.
- The tiered standard repayment plan offers a fixed monthly payment over 10 to 25 years, based on the outstanding balance of the loan(s).
The new rule also applies to parent borrowers with existing Parent PLUS Loans who take out a new loan on or after July 1, 2026, because the law requires that all Parent PLUS Loans be repaid under the same repayment plan.
Parents who currently have Parent PLUS loans in repayment and who borrow a Parent PLUS loan on or after July 1, 2026, will have all their Parent PLUS loans moved to the tiered standard repayment plan, which may change their monthly payments.
Current Parent PLUS Loan borrowers may repay their loans under the following repayment plans until their loans are fully repaid, provided they do not borrow new Parent PLUS Loans on or after July 1, 2026:
- 10-year standard repayment plan
- Extended repayment plan
- Graduated repayment plan
Parent PLUS Loan borrowers who consolidated their Parent PLUS Loans into a Direct Consolidation Loan before July 1, 2026, may repay their loans under the income-contingent repayment (ICR) plan through June 30, 2028. At that point, the ICR plan will sunset, and Parent PLUS Loan borrowers repaying under ICR will be moved to the income-based repayment (IBR) plan.
Parents who want access to an income-driven repayment plan and/or loan forgiveness for their Parent PLUS Loans must:
- Have consolidated their Parent PLUS Loans into a Direct Consolidation Loan and enrolled in the income-contingent repayment (ICR) plan prior to July 1, 2026, AND
- Not have borrowed a new Parent PLUS Loan on or after July 1, 2026.
The new tiered standard repayment plan is not a qualifying repayment plan for PSLF. As a result, borrowing a new Parent PLUS Loan on or after July 1, 2026, prevents borrowers from receiving PSLF, even if they have already made qualifying payments, because all Parent PLUS loans must be repaid under the new tiered standard repayment plan.
Parents planning to borrow a Parent PLUS Loan on or after July 1, 2026, but who want to preserve their eligibility for PSLF, may want to carefully consider other ways to help finance their dependent student’s education.
When financial aid funds are disbursed, any outstanding balances owed to the university are paid first. If there are any excess funds from your Parent PLUS Loan after settling the balance, a refund will be issued. Families can choose to keep their refund or send the extra funds to their loan servicer as a payment toward their Parent PLUS Loan.
For questions about refunds, please contact the Student Navigation Center.