Office of Financial Aid

University of Mississippi

Federal Direct PLUS Loan

What are Federal Direct PLUS loans? 

The Federal Direct Parent Loan for Undergraduate Students (PLUS) is available through the Direct Loan Program to help you pay for the education of dependent children.

A dependent child is defined as one who:

  • was born on or after January 1, 1989;

  • will not be working on a degree beyond a bachelor’s degree during the school year;

  • is not married;

  • does not have children or dependents who receive more than half of their support from him/her, now and through June 30, 2012;

  • is not an orphan or ward of the court or was not a ward of the court until age 18;

  • is not a veteran of the U.S. Armed Forces

Advantages are:

  • Option to defer payment until student graduates or drops below half time.

  • A cost-effective alternative to depleting savings or retirement accounts, using current income or borrowing against home equity.
  • The fixed interest rate is 6.41%.

  • There is no prepayment penalty.

  • The credit criteria are generally more lenient than for private loans.

  • In cases of economic hardship, repayment may be deferred for up to three years.

  • In the event of permanent disability or death of the borrower or student, your loan will be forgiven.


An eligible credit worthy parent is defined as natural, adoptive or step-parent.  The student must be enrolled in school at least half-time and must maintain Satisfactory Academic Progress. The Office of Financial Aid determines the amount of Direct PLUS loan eligibility in accordance with federal requirements.

Eligibility for the Direct PLUS loan depends on a modest credit check that determines if the parent has what is termed an “adverse credit history”.

Adverse Credit Conditions include but are not limited to:

  • Bankruptcy (Chapters 7,11, or 12 within the past 5 years).
    Note: Department Policy does not consider Chapter 13 bankruptcy as adverse credit.
  • Voluntary surrender within the last 5 years.
  • Repossession within the last 5 years.
  • Foreclosure proceedings started.
  • Foreclosure within the last 5 years.
  • Deed in lieu of foreclosure.
  • Accounts currently 90 days or more delinquent.
    • Unpaid collection accounts.
    • Charge offs/write offs.
  • Wage garnishment within the last 5 years.
  • Defaulted loan that has been claim paid.
  • Lease or contract terminated by default.
  • County/State/Federal tax lien, within the past 5 years. 

If a parent is denied for a Direct PLUS Loan, then the dependent student may be eligible to borrow up to an additional $4000 in Direct Unsubsidized loans if a freshman or sophomore and $5000 if a junior or senior. Please note that if one parent is approved and another parent is denied for the same student, then the dependent student is ineligible for the additional Direct Unsubsidized loans per federal regulations. How Much Can Be Borrowed? 

Parents may borrow up to their student’s total cost of attendance less other financial aid received such as grants and scholarships. On the student’s financial aid award package this is listed as an “estimated Credit based loan,” which will show you how much could potentially be applied for to be borrowed. The total cost of attendance is determined by the Office of Financial Aid based on an average cost for tuition, books, room and board, travel, and miscellaneous expenses for the academic year. It is important that each family fully understand how a Direct PLUS loan will impact them financially. Most financial experts advise that one should not incur debt (excluding mortgage debt) that results in total monthly payments (debt-to-income ratio) exceeding 20% of your monthly gross income.

Interest Rates

The interest rate is fixed at 6.41%.

Loan Fees

For all Direct PLUS and Graduate PLUS loans made between July 1, 2013 and June 30, 2014, the origination fee will be 4.204% of the principal loan amount.



Loan amount


Total up-front fee (4.20%)

 – $420

Amount disbursed Fall


Amount disbursed Spring



How do my parents process a Federal Direct PLUS application? 

  1. If eligible, a student will be awarded an Estimated Credit-Based Loan on their Financial Aid Award Notification. A FAFSA must be filed to establish eligibility.

  2. Parent borrowers who wish to utilize the Direct PLUS program should have their student accept the estimated Direct PLUS Loan on the Award Notification indicating the amount desired.

  3. The Direct Loan Program will conduct a pre-approval credit investigation and notify the parent as to approval or denial. If the loan is denied, the Office of Financial Aid will contact the parent about other borrowing options.

  4. If approved for a Direct PLUS Loan, the Direct Loan Program will send the parent a school-certified PLUS Loan master promissory note. (This contract can be valid for up to 10 years as long as the parent borrows every 12 months). Parents should review the master promissory note for accuracy, sign it, and return it to the lender.

  5. Loan proceeds will be sent directly to the University. The disbursement will reflect the amount of the loan less origination fees (4.20 %). The proceeds will be applied to the students account to clear any balances. Remaining funds will be direct deposited or mailed directly to the parent borrower in the form of a paper check.

Apply Now for Fall/Spring 2014-2015

Please be aware that any refunds from Direct PLUS loans will be sent directly to the parent borrower. While the Department of Education’s Direct PLUS application asks parents whether they want any refunds to go to the student or the parent, The University of Mississippi sends all Direct PLUS refunds exclusively to the parent borrower.

 If the parent borrower did not set up direct deposit with the Bursar, then any Direct PLUS refunds will be sent via paper check to the parent borrower’s address.