Federal Direct Parent PLUS Loans

Credit Check

The U.S. Department of Education will conduct a credit check at the time of application. The applicant must not have an adverse credit history.

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.

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 the decision.

For more information, please visit the Parent PLUS Loans and Adverse Credit page.

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. Loan fees cannot be waived and must be deducted in accordance with federal law.

As a result, the disbursed amount (the amount paid to your student’s account) will be less than the amount borrowed. Consider the loan fee when deciding how much to apply for.

Borrowers must repay 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.

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.

Parents should apply for the term (s) (enrollment period) 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 may 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.

The OBBA established new loan limits for the Direct PLUS Loan Program, impacting how much parents can borrow for their eligible dependent undergraduate students, and provides a limited exception for certain parent borrowers.

Limited Exception

Eligible Parents

A parent borrower who qualifies for the limited exception and is subject to the prior Direct PLUS Loan limits if the dependent undergraduate student on whose behalf they are borrowing the Direct PLUS:

• was enrolled in a program of study at an institution as of June 30, 2026,
• borrowed a Direct Loan for such program of study prior to July 1, 2026 (or the parent borrowed a Direct PLUS Loan on behalf of the dependent student for such program of study). Students
• are currently enrolled at the same institution in the same program of study, and
• have not stopped their enrollment in the same program at the same institution at any point as of July 1, 2026. An approved leave of absence is considered to be a break in enrollment.

Please note that your student can change majors and you will remain eligible for the limited exception. Changing credential level will cause you to lose eligibility for the limited exception. Credential refers to the degree a student is seeking, for example, a bachelor’s or associate's degree.

Parent borrowers who qualify for this limited exception may borrow up to the estimated cost of attendance minus the amount of any other financial aid their student received for that academic year.

Ineligible Parents

Parent borrowers who do not qualify for the limited exception are subject to the new annual loan limit (the maximum amount that can be borrowed each academic year) and aggregate loan limit (the maximum loan amount that can be borrowed for each dependent student’s undergraduate study).

For each academic year beginning on or after July 1, 2026, the maximum amount of all Direct PLUS Loans that all parents may borrow on behalf of each dependent student may not exceed $20,000. The maximum amount of Direct PLUS Loans a parent may borrow for a dependent student over the course of their undergraduate study is $65,000 per child, regardless of any amounts repaid, forgiven, or discharged.

Planning Annual PLUS Borrowing to Keep Continued Access 

New Parent PLUS Loan borrowers and those ineligible for the limited exception should plan accordingly. The new aggregate limit of $65,000 means that borrowing the annual maximum ($20,000 per year) 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.

To ensure sufficient Parent PLUS Loan eligibility throughout the student’s undergraduate program, parents should request a lower amount on the PLUS loan application.

Splitting the total aggregate eligibility of $65,000 equally over a four-year program will ensure Parent PLUS Loan eligibility while the student is in school.

For example, a parent can request $16,250 per academic year.

Select the maximum amount option only if you plan to borrow the full $20,000 for the academic year. Please note that doing so will cause you to reach your total aggregate eligibility before the end of a four-year program.

Tips for Borrowing

Remember to include the loan fee in the amount you apply for!

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.

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

If a Parent PLUS Loan borrower needs more than the annual borrowing limit or reaches the aggregate limit before the student graduates, additional funding options include external scholarships, an interest-free payment plan, and private loans.

Parents approved for a Parent PLUS Loan must sign a Direct PLUS Loan Master Promissory Note (MPN) before their loan can be disbursed to their 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.

Salem State will receive the approved Parent PLUS Loan application directly from the Department of Education and will review it for processing. 

Salem State will add the Parent PLUS Loan to a student’s account once the student has been packaged for financial aid and has accepted or declined their offered federal loans, ensuring the PLUS loan is added for the correct amount. If the loan cannot be added to the student’s account, the student and parent will be notified. 

Several options are available 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. The borrower must provide documentation to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to the borrower’s adverse credit history.

2. Obtain An Endorser

Parents who choose not to appeal the credit decision can obtain an endorser (similar to a co-signer) 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 you are borrowing for.

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.

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.

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.

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.
• 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. We will make changes to the Parent PLUS Loan once we receive a statement from the parent/borrower.

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:

• Studentaid.gov – Who is my Loan Servicer
• Studentaid.gov - Repayment Plans

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 request a deferment if they didn't do so 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 loan payments. 

If a deferment is not requested, borrowers are expected to begin making payments after the loan is fully disbursed to the student's account.

Repayment Plan Updates

PLUS borrowers whose loans are all first disbursed before July 1, 2026, will have access to the following repayment plans:

• Standard Repayment Plan
• Graduated Repayment Plan
• Extended Repayment Plan
• Income-Based Repayment (IBR) Plan (requires additional steps)
• Income-Contingent Repayment (ICR) Plan (requires additional steps)
• Pay As You Earn (PAYE) Plan

Parent PLUS loan borrowers must take additional steps before they can access the IBR or ICR Plans. Specifically, they must consolidate their parent PLUS loans into a Direct Consolidation Loan before they can access either the IBR or ICR Plans. After consolidating parent PLUS loans, borrowers must make at least one payment under the ICR Plan before they can access the IBR Plan.

Borrowers who take out a PLUS loan for parents and have any type of Direct Loan, including a Direct Consolidation Loan, first disbursed on or after July 1, 2026, are restricted to the Tiered Standard Plan only.

Borrowers who want to repay their parent PLUS loans using the IBR or ICR Plans must have their Direct Consolidation Loan disbursed before July 1, 2026.

The Department strongly recommends that borrowers who must consolidate their loans to access the IBR, ICR, and PAYE Plans apply for their consolidation loan at least three months before July 1, 2026, to ensure it is disbursed before July 1, 2026.

Borrowers who have a Direct Consolidation Loan that includes a PLUS loan for parents and want to access the IBR or ICR Plans can enroll in either plan at any time, with the following two restrictions:

1. The ICR Plan will be eliminated no later than July 1, 2028. Borrowers with a Direct Consolidation Loan that includes a PLUS loan for parents who want to access the IBR Plan must first make a single payment while enrolled in the ICR Plan before the ICR Plan is eliminated no later than July 1, 2028.
2. If at any point a borrower receives any type of Direct Loan (including a Direct Consolidation Loan) first disbursed on or after July 1, 2026, they will have access to only the Tiered Standard Plan, even if they had been enrolled in the IBR or ICR Plans. Borrowers who take all of the required steps to access the IBR or ICR Plans and then take out any type of Direct Loan that is first disbursed on or after July 1, 2026, will have their servicer move their loans already in repayment to the Tiered Standard Plan. They’ll have the option to apply for and enroll in the Repayment Assistance Plan for their Direct Loans that aren’t parent PLUS loans or Direct Consolidation Loans that don’t include parent PLUS loans.

OBBBA eliminates the ICR and PAYE Plans entirely in the future. The Department of Education will publish more information about the ICR enrollment deadlines that borrowers with consolidated parent PLUS loans must meet before the ICR Plan is eliminated, so they can continue to access the IBR Plan.

PLUS loan borrowers whose loans are first disbursed before July 1, 2026, and who plan to receive new loans on or after July 1, 2026, have the following repayment options:

• Borrowers who have parent PLUS loans or a Direct Consolidation Loan that includes a parent PLUS loan, or any other type of Direct Loan, any of which are first disbursed on or after July 1, 2026, are permitted to repay the Direct Consolidation Loan or the parent PLUS loan under only the Tiered Standard Plan.
• Borrowers who have other types of Direct Loans that are not a PLUS loan for parents, or a Direct Consolidation Loan that includes a PLUS loan for parents, may repay those other loans under either the Repayment Assistance Plan or the Tiered Standard Plan.
• Borrowers who have a Direct Consolidation Loan that paid off a Direct Consolidation Loan that paid off a PLUS loan for parents (sometimes referred to as a double consolidation) or any other type of Direct Loan, any of which is first disbursed on or after July 1, 2026, have access to only the Tiered Standard Plan for their Direct Consolidation Loan or parent PLUS loans.