Federal 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 the Parent PLUS Loans and Adverse Credit page.

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.

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.

The OBBBA provides a limited exception for certain parent borrowers.

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 the program of study before July 1, 2026 (or the parent borrowed a Direct PLUS Loan on behalf of the dependent student for such program of study),
• is currently enrolled at the same institution in the same program of study, and
• has 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 not considered to be a break in enrollment.

Credential refers to the degree a student is seeking, for example, a bachelor’s or associate's degree. Students cannot change their credential level and remain eligible for the exception, but they can change majors within their credential.

Parent borrowers who qualify for this limited exception may borrow up to—but not more than—the amount of their student’s estimated cost of attendance, minus any other financial aid received for that academic year. The school determines the cost of attendance using federal guidelines.

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).

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.

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.

On the Parent PLUS Loan application, parents should select the maximum amount option only if they intend to borrow their full loan limit for the aid year. To ensure adequate Parent PLUS Loan eligibility throughout the student’s undergraduate program, parents should request a lower amount on the application. 

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.

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

The Parent PLUS Loan will be added 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. 

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

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.

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.

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 amount of the reduction 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. 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.

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.

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 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.

Repayment Plan Updates

Parent PLUS borrowers with all their Direct PLUS Loans for parents are first disbursed before July 1, 2026, and don’t plan to receive new parent PLUS loans on or after July 1, 2026, will retain access to many of the existing fixed payment repayment plans, as well as the Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR) Plans (if they take additional steps).

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 parent PLUS loans have been consolidated, 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, that is 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 of Education is not currently experiencing a delay in processing consolidation applications, but does anticipate that a large number of borrowers will apply to consolidate their loans between now and 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 3 months before July 1, 2026, to ensure the consolidated loan 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 who have a Direct Consolidation Loan that includes a PLUS loan for parents and 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) that was first disbursed on or after July 1, 2026, they will have access only to 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 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.