Federal PLUS loans are available to all parents of dependent undergraduate students regardless of income. Qualification is based solely on good credit. You 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. Your child must be a dependent student who is enrolled at least half time at Walden. There are no debt-to-income ratio guidelines or employment verification requirements. Parents may borrow up to the total education cost for the year, minus any other financial aid that the student is receiving. The total education cost can include tuition and fees, room and board, books and supplies, transportation, and living allowance.

Interest Rates:

  • Federal Parent PLUS loans first disbursed on or after July 1, 2018 and before July 1, 2019 have a fixed interest rate at 7.60%, with interest beginning to accrue upon disbursement until it is repaid in full.
  • Federal Parent PLUS loans first disbursed on or after July 1, 2019 and before July 1, 2020 have a fixed interest rate at 7.08%, with interest beginning to accrue upon disbursement until it is paid in full.
    • The interest rate cap is 10.5%.

Loan Fees: 

  • Federal Direct Parent PLUS loans first disbursed on or after October 1, 2018 and before October 1, 2019 have a 4.248% loan fee.
  • Federal Direct Parent PLUS loans first disbursed on or after October 1, 2019 and before October 1, 2020 have a 4.236% loan fee.

The loan fee is retained by the federal government to reduce the cost of supporting these low interest loans.

Process

  • If one has not been submitted for the current year, the student completes the Free Application for Federal Student Aid (FAFSA) online at https://studentaid.ed.gov/sa/fafsa.
  • The parent completes the Parent PLUS Loan Request and Parent PLUS Master Promissory Note (MPN), and the student completes undergraduate-level Direct Loan Entrance Counseling. All forms are available online at StudentLoans.gov.
  • The Office of Financial Aid receives the approved/endorsed Parent PLUS Loan Record and the Direct Parent PLUS MPN from the U.S. Department of Education (ED) and adds the Parent PLUS award to myFinAid.
  • Student goes to myFinAid to accept, reduce, or decline the Parent PLUS award amount.
  • If the student is registered and all official transcripts are on file with the Office of Admissions, the Office of Financial Aid sends a Direct Parent PLUS Loan origination record to ED.

Decisions

The U.S. Department of Education is responsible for all Parent PLUS loan credit decisions. Parent PLUS loan borrowers are required to pass a simplified credit check, meaning that the U.S. Department of Education is not looking for a certain credit score or for an extensive credit history, but simply the absence of an adverse credit history. Students can view the status of their parents’ application by logging in to StudentLoans.gov or by calling Federal Direct Loans at 1-800-557-7394. Effective March 29th, 2015 credit decisions remain valid for 180 days.

The following may cause a Parent PLUS Loan to be denied. Please refer to StudentLoans.gov for more information.

  • Bankruptcy discharge
  • Charge off account, collection account and/or 90 or more days delinquent on any debt
  • Deed in lieu of foreclosure
  • Defaulted loan that is claim paid
  • Foreclosure process started
  • Foreclosure
  • Repossession/voluntary surrender
  • Tax lien
  • Wage garnishment

Parents will receive an immediate approval or denial of their application upon electronic completion as well as the loan reference number, which is needed if the parent wishes to pursue an endorser. The Office of Financial Aid will be notified electronically of the credit decision only if the application was completed electronically. Applications are not approved or denied based on the dollar amount requested; therefore, parents should not complete additional applications once a denial is rendered by the U.S. Department of Education. Once the loan application is denied, the parent must either find an endorser or appeal the credit decision by documenting extenuating circumstances.

The Office of Financial Aid has no control over or influence on the credit decision rendered by the U.S. Department of Education. All correspondence regarding credit appeals and endorsers must be sent to the U.S. Department of Education.

Approval for the Parent PLUS loan is loan specific. It is possible to be approved for one loan and denied at a later date for a new loan. Denied parents still have two options to obtain the Parent PLUS Loan:

  1. Review their credit report (for free) at http://www.annualcreditreport.com/ for possible errors and correct them before appealing directly to the U.S. Department of Education.
  2. Obtain an endorser who does not have an adverse credit history. The endorser will be responsible for repaying the Direct Parent PLUS Loan if the borrower does not.

Endorsing a Parent PLUS Loan

The steps below are to be taken by the parent endorser. These steps must be completed electronically and in a single session; paper addenda will not be accepted.

  1. Create an FSA ID at https://fsaid.ed.gov. Endorsers must log in using their own FSA ID to complete an endorser addendum.
  2. Sign on to StudentLoans.gov. This is the website where the endorser electronically co-signs the loan.
  3. Click on” Complete Endorser Addendum” (under $$Obtain Aid at bottom of the webpage).
  4. Enter the Endorser Code or an Award Identification Number (provided by parent borrower) and follow the instructions.
  5. Accept or reduce the Parent PLUS Loan amount. This will need to be done prior to the record being sent for certification.

Disbursement

Usually done in three equal amounts at the beginning of each semester/quarter and sent directly to the university. A federal loan fee may be deducted from the proceeds.

Repayment

Federal Direct Parent PLUS loan repayment normally begins within 60 calendar days after the loan has been fully disbursed. In certain circumstances, parents may elect to repay the loan on a graduated repayment schedule, making interest-only payments (the minimum is based on the term of the loan and must be at least $50 per month) for a portion of the repayment term.

Do you have questions about financial aid? If you haven’t yet applied to Walden, please contact an enrollment advisor at 855-646-5286 in the United States. If you are a current student, please contact a financial aid advisor at finaid@mail.waldenu.edu or call 1-800-WALDENU (1-800-925-3368).

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