Federal Direct Parent PLUS Loans

• The U.S. Department of Education is the lender. 
• The borrower must not have an adverse credit history. A credit check will be conducted at the time of application. The U.S. Department of Education determines if borrowers meet credit history criteria.
  • If the borrower has an adverse credit history, they may still be able to receive a Direct PLUS Loan if they meet additional requirements.
  • Salem State is only notified of the credit decision and has no input regarding the credit decision.
  • For more information, please visit Direct PLUS Loans and Adverse Credit. 
• The interest rate for Direct PLUS Loans is 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 principal amount of the loan and is proportionately deducted from each loan disbursement. The Department of Education deducts the fee before any loan money is disbursed, so the loan amount received will be less than the amount a parent has to repay.
    For more information on interest rates and loan fees, please visit Interest Rates and Fees for Federal Student Loans. 
• Direct PLUS Loans are unsubsidized loans, meaning the interest accrues throughout the life of the loan, including while the student is enrolled in school. 
• Parents cannot transfer their loans to their children. The parent is the borrower and is legally responsible for repaying the loan. 
• Federal Student Loans: Direct PLUS Loan Basics for Parents provides parents with information on Direct PLUS Loans for parents. It includes an overview of eligibility, the application process, and repayment.
• It is the students and their family's personal choice regarding who should apply for a Direct PLUS Loan. 

To receive a Direct Parent PLUS loan, you 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 only borrow a PLUS loan 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 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 to receive 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

• Parents must complete the Direct PLUS Loan Application for Parents on studentaid.gov and will need  Federal Student Aid ID (FSA ID) and password.
  • If they have forgotten their FSA ID and password, they can retrieve them at fsaid.ed.gov.
• If the person applying for the loan has placed a security freeze on your credit file, they must lift or remove the freeze at each credit bureau before starting the PLUS application. The Department of Education will not process the application if they have a security freeze on their credit file.
• Parents approved for a Direct PLUS Loan must sign a Direct PLUS Loan Master Promissory Note (MPN) agreeing to the loan terms before any funds are disbursed. The MPN explains the terms and conditions of all Direct PLUS Loans and constitutes a legally binding agreement to repay all Direct PLUS Loans received under the Direct PLUS Loan MPN.
• If a parent is taking out Parent PLUS loans for more than one child, they will need to sign separate Direct PLUS MPNs for the loans each child receives. 

• There are no set borrowing limits for Direct 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, suppose 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). In that case, a parent may borrow up to $12,000 for the academic year.
• Parents may apply for an amount over the estimated cost of attendance, but Salem State cannot award the loan over the cost of attendance.
• Parents should apply for the actual enrollment period their student will be attending.
  • If a student is enrolled in the entire academic year (Fall and Spring terms), parent(s) should apply for the whole academic year. The final loan amount will be disbursed half in the Fall term and half in the Spring term.
  • If a student is only attending one term, the final loan amount will be disbursed within the term.
• We strongly suggest students add their parent(s) as an "Authorized User" to their TouchNet account. Authorized Users can see the account activity, charges, and the current bill to help determine the amount to borrow. 
• Be sure to include any loan fees in the amount to apply for. 

If a parent is denied a Parent PLUS Loan, there are several options to move forward:

• Obtain an Endorser
  • Parents can obtain an endorser (similar to a cosigner) with no adverse credit history. The endorser agrees to repay the Parent PLUS loan if the borrower cannot. A credit check will be performed on the endorser.
  • The PLUS Loan endorser cannot be the student.
  • The endorser will be required to create an FSA ID and password.
  • The endorser must complete the Endorser Addendum at studentaid.gov.   
  • The borrower will receive an endorser code or an award identification number. The endorser will need the Borrower's Last Name and the Endorser Code or Award Identification Number. The borrower may have received an email from the Department of Education containing the endorser code.
• Appeal a Credit Decision  
  • A borrower can document to the satisfaction of the U.S. Department of Education that are extenuating circumstances relating to their advise credit history by filing an appeal. 
  • Borrowers have the right to appeal an adverse credit decision if they think the information causing the adverse credit decision is incorrect or if there are extenuating circumstances relating to the adverse credit history. 
• The borrower must complete PLUS Credit Counseling whether they find an endorser or appeal the credit decision. 
• Students whose parents are denied a PLUS loan, and do not wish to obtain an endorser or appeal the credit decision, may qualify to receive additional Direct Unsubsidized Loan funds: 
  • First and Second-year students can receive up to an additional $4,000, and Third Year and beyond can receive up to an additional $5,000 in Direct Unsubsidized Loan funds.
  • These funds will automatically be awarded to the student after the loan denial is received by Salem State.

• The Department of Education will assign the borrower a loan servicer. The loan servicer will provide updates on the loan status and handles the billing and other services for the loan. Loan servicers work with borrowers on repayment optionsand other tasks related to their federal loans.
• When financial aid funds disburse, any outstanding balances owed to the university are paid first. If there are any excess funds after the balance has been paid, a refund will be generated. Refunds either be directly deposited into the student's checking or savings account or mailed to the student at their permanent address on file with Salem State within two weeks.
• The Student Accounts Office is responsible for issuing student refunds. For more information on direct deposits, please visit How to set up direct deposit/eRefund. 

• Parents can request a deferment. During deferment, borrowers will not need to make any payments while the student is enrolled at least half-time and for an additional six months after the student graduates, leaves school, or drops below half-time enrollment. 
• Parents can request a deferment as part of the loan application process. 
• If a deferment is not requested, borrowers begin repayment after the loan has been fully disbursed.
• During any period when borrowers are not required to make payments, interest will accrue on the loan. Borrowers can pay the accrued interest or allow the interest to be capitalized when repayment begins. 
• The loan servicer will notify the borrower when the first payment is due. 
• Families can review the Loan Simulator and current repayment plans at studentaid.gov to help determine which payment they may be eligible for and see estimates for how much they will pay monthly and overall. 

Parents can request an adjustment to their Parent PLUS Loan by submitting a written statement with the following information

• Borrowers/Parent's Name 
• Date of Statement
• Student's Name and Salem State ID number
• The change they would like made to their loan
• The amount they would like the loan should be adjusted to
• The term they would like the adjustment made (Fall/Spring, Fall only, Spring only)

The statement must be signed with a wet, physical signature. The statement can be emailed to navcenter@salemstate.edu or by secure fax to 978-542-6876. The statement must come from your parent because they are the borrowers for the Parent PLUS Loan. Changes will be made to the Parent PLUS Loan once a statement is received from the parent/borrower.

We encourage parents to review their student's account and any expected refund amount to calculate what they believe their student will need to cover their balance. Be sure to include any books and personal expenses in your calculation.