Gogebic Community College

Federal Direct Parent Plus Loans

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Federal Direct Parent Plus Loans

 

New Federal Financial Aid Changes

The One Big Beautiful Act (OBBB) was signed into law on July 4, 2025 and makes significant changes to federal financial aid programs, including new loan limits, new loan repayment options, and updated eligibility requirements, for both current and future students. H.R. 1 - One Big Beautiful Bill Act (Full Text).

What's Changing:

Previously, parents who borrowed Parent PLUS loans had the option to consolidate and enroll in the only Income-Driven Repayment (IDR) Plan available to Parent PLUS borrowers, the Income-Contingent Repayment (ICR) plan. This plan offers: 

  • Payments based on income (sometimes as low as $0 per month)
  • A monthly payment cap at 20% of discretionary income
  • A path to eventual loan forgiveness

The protection to consolidate and enroll in the ICR plan is no longer available for new Parent Plus loans and existing Parent Plus loans after June 30, 2026. Under the new rules, Parent PLUS borrowers will only have the standard repayment plan-with fixed monthly payments based on the total amount borrowed.

Why This Matters

  • Parent PLUS loans can be as high as $65,000 per student and many parents already owe more than $100,000.
  • When applying for a Parent PLUS Loan, families are not assessed on their ability to afford the payments—only on whether they have an adverse credit history.
  • Without income-driven repayment, families who cannot afford large monthly payments risk:
  • Damaged credit scores
  • Wage garnishment
  • Tax refund and Social Security withholding 

There is a Limited Window to Protect Repayment Options

If you already have Parent PLUS loans, consolidate your Parent PLUS loans before June 30, 2026.  

  • The consolidation has to be processed, approved, and funded by June 30, 2026, to remain eligible for IDR plans, like ICR.
  • Apply as soon as possible to ensure adequate processing time. Consolidation application processing times will vary and may be longer than usual.

Families who act quickly may still benefit from existing repayment options before they disappear. 

Before Taking on New Parent PLUS Loans

Working with your loan servicer to consolidate and enroll in the ICR plan will protect borrowers with existing Parent PLUS loans. However, even if these steps are taken, all new Parent PLUS loans are subject to the limited repayment options under OBBB. This means that if you borrow a Parent PLUS Loan on or after July 1, 2026, even if you have previous PLUS Loans, the new Parent PLUS Loan features the new, stricter repayment rules.

For more details about changes to the Parent PLUS Loan, check out the Parent PLUS Loan Resource web page.

Disclaimer

The information provided by Gogebic Community College is intended to orient students to the changing landscape of federal student loan programs. While it is based on our good-faith understanding of the evolving federal standards, students should refer to federal governmental sources for official guidance.

WHAT IS A FEDERAL DIRECT PARENT PLUS LOAN?

A Federal Direct PLUS Loan is a credit-based loan from the U.S. Department of Education designed to help parents of dependent undergraduate students meet the cost of their education. Under the PLUS loan program, eligible borrowers may request up to the full cost of attendance minus any other financial aid received. Please note that credit checks are strictly required, and interest begins accruing on these loans upon disbursement.

GET MORE INFORMATION

For detailed information on Direct PLUS Loans, including applications, visit Direct PLUS Loans for Parents on the Federal Student Aid website.

Parents can start applying for Parent PLUS Loan for the 2026-27 Academic Year starting June 1, 2026. 

WHO QUALIFIES?

To be eligible for a Federal Direct Parent PLUS Loan for Parents:

      • The parent borrower must be the student's biological or adoptive parent. In some cases, the student's stepparent may be eligible.
      • The student must be a dependent student who is enrolled at least half-time. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, or a ward of the court.
      • The parent borrower must pass a credit check.
      • The student and parent 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.

HOW MUCH CAN I BORROW?

The maximum amount you can borrow each academic year depends on your grade level  dependency status and  hours of enrollment. See the chart below for annual and aggregate (lifetime) borrowing limits. You may not be eligible to borrow the full annual loan amount because of your expected family contribution or the amount of other financial aid you are receiving. To see examples of how your Federal Direct Subsidized or Unsubsidized award amount will be determined. Direct loan eligibility and loan request amount must be greater than $200 for a loan to be processed.

If you are a first-time borrower on or after July 1, 2013 and before July 1, 2021, there is a limit on the maximum period of time (measured in academic years) that you can receive Federal Direct Subsidized Loans. This time limit does not apply to Federal Direct Unsubsidized Loans or Federal Direct PLUS Loans. If this limit applies to you, you may not receive Federal Direct Subsidized Loans for more than 150 percent of the published length of your program.

Legacy Provision: For Parent or student borrowers who have had a loan disbursed before July 1, 2026

      • No annual or lifetime aggregate loan limit

New borrowers who have had their first loan disbursed after July 1, 2026

      • The annual limit of Parent PLUS Loans allowed per dependent student is $20,000.
      • The total maximum amount of Parent PLUS Loans allowed per dependent student is $65,000.

INTEREST RATES AND FEES

Click here for information on interest rates and fees associated with the Federal Direct Parent PLUS Loan program.

APPLYING FOR FEDERAL DIRECT PARENT PLUS LOAN

How to apply for Federal Direct Parent PLUS Loan

  1. Complete the Parent PLUS Loan Application: Apply for a PLUS Loan for Parents. Log in with your parent FSA ID (not the student's). You will need to enter your personal info, employer info, school name, and the loan amount (up to the school's cost of attendance minus other aid).
  2. Credit Check: You will receive an immediate credit decision.
  3. Complete the Parent PLUS Master Promissory Note (MPN): If approved, the applicant will then need to complete the 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. It also explains the terms and conditions of the loan. Complete PLUS MPN for Parents. The MPN is good for multiple years. However, an approved application is required each year.
  4. Complete the GCC Federal Direct Parent PLUS Request Form

DENIED FEDERAL DIRECT PARENT PLUS LOAN

The parent borrower must pass a credit evaluation before the loan will be approved. If denied, the Direct Loan Servicer will notify the parent borrower and explain why the credit evaluation was denied and provide the name and address of the credit bureau that supplied the credit data.

The Department of Education will notify the parent via email to determine if the parent borrower wants to:

      • Appeal the credit decision with the Direct Loan Servicer, or
      • Reapply for the loan with an endorser (cosigner), or
      • Request that GCC cancel the Parent PLUS Loan and have the student borrow additional unsubsidized Federal Direct Student Loan. The additional amount depends on the student's remaining loan eligibility (there is an annual limit based on grade level) and cost of attendance.

DISBURSEMENT OF FUNDS

The Business Office is the department that releases the Parent PLUS Loan funds after receiving the necessary information from the Financial Aid office. Tuition and fees, and on-campus housing payments, if applicable, are deducted from the student's financial aid which includes the approved amount of Parent PLUS Loan. Half of the approved loan amount will be disbursed during the fall semester and half during the spring semester. 

Any remaining Parent PLUS Loan funds are mailed to the parent borrower's address on the Master Promissory Note (MPN) or, the parent borrower may authorize any remaining loan funds to be issued to the student. To do so, the parent must indicate the refund method is the student on the Master Promissory Note

SAMPLE REPAYMENT

The following table is based on a standard 10-year repayment plan. Use this table to estimate the monthly payment amount for your Federal Direct PLUS Loan(s).

 

TOTAL
AMOUNT
BORROWED

INTEREST RATE

7.00%

7.50%

8.00%

8.25%

8.50%

$5,000.00

$58.05

$59.35

$60.66

$61.33

$61.99

10,000.00

116.11

118.70

121.33

122.65

123.99

15,000.00

174.16

178.05

181.99

183.98

185.98

20,000.00

232.22

237.40

242.66

245.31

247.97

25,000.00

290.27

296.75

303.32

306.63

309.96

30,000.00

348.33

356.11

363.98

367.96

371.96

35,000.00

406.38

415.46

424.65

429.28

433.95

40,000.00

464.43

474.81

485.31

490.61

495.94

45,000.00

522.49

534.16

545.97

551.94

557.94

RIGHT TO CANCEL

Federal regulations allow student loan borrowers up to 14 days after disbursement of funds to cancel or reduce the loans. The following describes the process to request a cancellation or reduction of student loans. To request changes to your loan(s), please complete a Federal Direct Loan Change Request Form and return it to the Financial Aid Office. If the cancellation results in a balance due on your student account, payment will be required immediately.

INFORMATION DISCLOURSE

Once a parent completes the process for a Federal Direct Parent PLUS Loan and funds are disbursed, the parents information regarding the loan is reported to the National Student Loan Database System (NSLDS) by the federal processor. The information on NSLDS is accessible by any institutional or governmental entity that has legal access to NSLDS. The information is updated as needed with regards to enrollment status, graduation dates, and additional loans taken.

National Student Loan Database System (NSLDS)- Students may also get access online and set up an account.
National Student Clearinghouse

STUDENT LOAN CODE OF CONDUCT

View the GCC Student Loan Code of Conduct

 

STUDENT LOAN OMBUDSMAN                                              

Student Loan Ombudsman:

The Federal Student Aid Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans.

On-line assistance:

Click here for online assistance| Resolving Disputes with Federal Student Aid

Contact Information for the FSA Student Loan Ombudsman's Office:

Telephone: (877) 557-2575 (toll free)
Fax: (606) 396-4821
Mail:
FSA Ombudsman Group
P.O. Box 1843
Monticello, KY 42633
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