Federal Direct PLUS (Parent) Loan
The Direct PLUS (Parent) Loan is available to parents of dependent, undergraduate students who are attending at least half-time (6 units) each semester, and who have received a financial aid award. Parents may borrow up to the Cost of Attendance (budget) minus other financial aid the student is awarded.
A credit check is processed when a PLUS (Parent) loan application is received. If the loan is denied due to adverse credit, you will have the opportunity to contact the Direct Loan Servicing Center to pursue a Co-signer or Endorser for the loan. If you choose to pursue a Co-signer or Endorser, you must:
- Notify the Financial Aid and Scholarship Office of your intent to pursue an endorser.
- View your student's MySJSU for updates to the "Offer/Accept" status on the Direct Loan PLUS.
- Once the Direct Loan PLUS is in "Offer/Accept" status, contact the Financial Aid and Scholarship Office for a Loan ID #.
- Once you have a loan ID#, the endorser logs into www.studentloans.gov with their PIN# and SSN. The endorser will fill out an Endorser Addendum.
- At this point, you must inform the Financial Aid and Scholarship Office that the endorser was approved for the loan.
- The borrower (Parent), may then log into www.studentloans.gov to sign the Master Promissory Note.
If you decline the option to pursue an endorser, your student may have additional Unsubsidized Stafford loan offered to them. The student's eligibility is limited by grade level ($4,000 max for freshman/sophomore; $5000 max for junior/senior.)
Students must be continuously enrolled in at least six units (half-time enrollment) each semester as an undergraduate to receive the loan. If the student drops below half-time enrollment at any time during the loan period, and/or if the student has not received satisfactory grades for the minimum number of units required, he/she may not be eligible for the loan proceeds the subsequent semester.
2014-15 Interest Rate
The Direct Loan interest rates for loans first disbursed between July 1, 2013 and June 30, 2014 are fixed. Under the new interest rate structure, all Direct Loans, except Direct Consolidation loans, will be "variable-fixed," meaning parents would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan. There is also interest rate cap at 10.50% for parent PLUS loan.
The interest rates are calculated using a base 10-year Treasury Note Index of 1.81% plus an add-on amount for each loan program - 4.60% for parent PLUS loan.
Deadline to submit PLUS application
- Fall only loan: December 6
- Academic year or Spring only loan: May 1
The first payment of principal and interest on a PLUS Loan is due sixty (60) days after the loan has been fully disbursed. Delayed Repayment Option: If requested, repayment can be delayed until six months after your student drops below half-time or graduates. You must request this by contacting the Direct Loan Servicer.
Disbursement of Funds
Disbursement of funds begins the first week of the semester and continues on a weekly basis. Academic year PLUS loans are disbursed to student's account in two equal installments usually at the beginning of each semester. Financial Aid funds are applied towards any current outstanding debt owed to the university (i.e., tuition, fees, etc.). Remaining funds, if any, are refunded to the parent by the Bursar's Office. View the Bursar's Office Refund process for more information.
Direct PLUS (Parent) Loan Application Process
Step 1: Student must have completed FAFSA, submitted requested documents and have a Financial Aid award.
Step 2: Submit Direct PLUS (Parent) loan application to the Financial Aid and Scholarship Office (FASO). Applications can be downloaded by clicking the FORMS link on the FASO home page.
Step 3: Once the Direct PLUS Loan application is received, information is forwarded electronically to the Direct Loan Processor for a credit check approval. FASO will receive an electronic notice of approval or denial from the U.S. Dept. of Education.
Step 4: FASO will electronically certify your loan eligibility and the amount you may borrow based on your student's financial aid award.
Step 5: FASO will send your student a message via my.sjsu.edu that directs the parent on-line to sign the Master Promissory Note (MPN), if required.