PLUS Loan Application Instructions

Direct PLUS Loans are unsubsidized loans for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance.  We have outlined information regarding this loan below. You can also read more about the Direct PLUS Loan and other federal aid programs by reading the U.S. Department of Education's Guide to Federal Student Aid.

Eligibility Requirements
Your son or daughter must complete a Free Application for Federal Student Aid (FAFSA) before you can receive the PLUS Loan.

The borrower must be the student's biological or adoptive parent or the student's stepparent, if the biological or adoptive parent has remarried at the time of application.  The student must be a dependent student who is enrolled at least half-time.  Parent PLUS loan borrowers cannot have an adverse credit history. In addition, parents and their dependent child must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs.  Dependent students whose parents have applied for but were unable to get a PLUS Loan are eligible to receive additional Direct Unsubsidized Loan funds.

Interest Rate and Fees
The interest rate for Direct PLUS Loans is a fixed rate of 7.9%. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement. In addition to interest, you pay a loan origination fee that is a percentage of the principal amount of each Direct PLUS Loan that you receive. The fee is deducted before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay. The Federal Direct PLUS Loan Program requires a 3% origination fee and a 1% default fee. There's an up-front rebate of 1.5%, so the net disbursement is 97.5% of the gross loan amount. (The borrower must make the first 12 payments on time to keep the up-front rebate.)

When to Apply
If you are going to borrow a PLUS loan, please wait until you have received your financial aid offer to complete this process. The award letter will be necessary to help you determine the amount you need to request. Families should not apply for a PLUS Loan earlier than mid-June since the PLUS loan requires a credit approval which is only valid for 90 days.               

Important Information for Previous PLUS Borrowers
Northwestern University will be processing all federal PLUS loans through the Direct Loan Program for the 2010-11 academic year. You should not apply through any lender other than the U.S. Department of Education. Applying through private lenders will cause unnecessary hits on your credit report and may delay processing of your loan. Please refer to our February announcement regarding our participation in the Direct Loan program for more information. 

PLUS Loan Instructions

The Parent PLUS Loan process requires the parent borrower to complete a FAFSA, a PLUS Loan request/application, authorize a credit check and complete a Direct PLUS Loan Master Promissory Note (MPN).  The application process is outlined below:

1. Complete the Free Application for Federal Student Aid (FAFSA)

Beginning with the with the 2011-12 academic year, federal regulations require that before a Parent PLUS Loan can be processed, a student and his/her parent(s) must complete a FAFSA for that academic year.  Please visit the FAFSA web site and complete the online form and designate Northwestern's Office of Financial Aid as the recipient of the information; our federal school code is 001739. 

2. Complete the Direct PLUS Loan Request

The Direct Parent PLUS Loan Request is a 4-step web form that is completed on the U.S. Department of Education's StudentLoans website. The parent borrower must sign in to the website with his or her Federal Student Aid (FSA) PIN. A borrower who does not have a PIN can request one via the FSA PIN web site.

The four steps are:

In addition to providing basic demographic information and completing a credit check, the Direct PLUS Loan Request allows borrowers to indicate a loan amount as well as whether any loan credit should be released to the parent or the student.

Your PLUS Loan amount will be processed to be disburse evenly over the three academic year (fall, winter and spring) unless you contact our office to instruct us otherwise.

3. Complete a Master Promissory Note

In addition to the Parent PLUS Request/Application, you must also complete a Parent PLUS Master Promissory Note (MPN). The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan(s). The MPN can be completed electronically  online at the StudentLoans website. If you are borrowing Direct PLUS Loans for more than one student, you'll need to complete a separate MPN for each one. To complete an MPN online, you will be required to use your Department of Education-issued PIN (not your child's). If you do not have a PIN, you may request one from the official PIN site.

In most cases, once you've submitted the MPN and it's been accepted, you won't have to fill out a new MPN for future loans you receive to pay for the educational expenses of the same student. You can borrow additional Direct Loans on a single MPN for up to 10 years.

You'll receive a disclosure statement that gives you specific information about any loan that the school plans to disburse under your MPN, including the loan amount and loan fees, and the expected loan disbursement dates and amounts.