The interest rate for a parent PLUS loan for loans first disbursed between July 1, 2026, and June 30, 2027, is 8.05%. This rate is fixed for the life of the loan, meaning it will not change over time. The U.S. Department of Education sets this rate each year based on a formula tied to the 10-year Treasury note auction in May.
How the Parent PLUS Loan Interest Rate Is Determined
The parent PLUS loan interest rate is set by federal law. It is calculated by adding a fixed margin to the high yield of the 10-year Treasury note at the last auction before June 1. For 2026-27, the margin is 4.60 percentage points, resulting in the 8.05% rate.
This rate applies to all parent PLUS loans disbursed during that award year. It is a fixed rate, so your monthly payment stays the same for the entire repayment term.
Historical Rates for Comparison
To give you perspective, here are recent parent PLUS loan rates for prior award years:
| Award Year | Interest Rate |
|---|---|
| 2025-26 | 8.05% |
| 2024-25 | 9.08% |
| 2023-24 | 8.05% |
| 2022-23 | 7.54% |
The rate can go up or down each year, but once you take the loan, your rate is locked in. This means borrowers who took a loan in 2024-25 are paying 9.08%, while new borrowers in 2026-27 pay 8.05%.
What Fees Are Associated with Parent PLUS Loans?
Besides interest, parent PLUS loans have an origination fee. For loans disbursed on or after October 1, 2020, and before October 1, 2026, the fee is 4.228% of the loan amount. This fee is deducted from the loan proceeds before the money is sent to the school.
For loans disbursed on or after October 1, 2026, the fee might change, but as of August 12, 2026, the current fee is 4.228%. Always check the official Federal Student Aid website for the latest fee schedule.
How to Reduce the Cost of a Parent PLUS Loan
While the interest rate is fixed, there are ways to lower your overall cost. Consider these strategies:
- Make interest payments while your child is in school. Interest accrues from the first disbursement, and paying it early prevents it from being capitalized (added to the principal).
- Set up automatic payments to get a 0.25% interest rate reduction. This small discount can save you money over the life of the loan.
- Pay more than the minimum monthly payment whenever possible. Extra payments go directly to the principal, reducing the total interest you pay.
- Explore loan forgiveness programs if you work in public service or for a nonprofit, though parent PLUS loans are not directly eligible for Public Service Loan Forgiveness (PSLF) unless you consolidate them into a Direct Consolidation Loan and meet other requirements.
Can You Refinance a Parent PLUS Loan?
Refinancing with a private lender might get you a lower interest rate, especially if your credit score is strong. However, refinancing federal loans into a private loan means losing federal benefits like income-driven repayment plans, deferment, and forgiveness options. Weigh the pros and cons carefully before refinancing.
How to Apply for a Parent PLUS Loan
To apply, you must complete the Free Application for Federal Student Aid (FAFSA) and then submit a Parent PLUS Loan application at the Federal Student Aid website. The U.S. Department of Education will perform a credit check. You must not have an adverse credit history to qualify.
The loan is taken out in the parent’s name, not the student’s. The parent is responsible for repaying the loan, even if the student does not finish school or cannot find a job after graduation.
Important Dates and Deadlines
For the 2026-27 academic year, the FAFSA becomes available on October 1, 2026. The deadline for submitting the FAFSA varies by state and school. Parent PLUS loans can be applied for after the student’s FAFSA is processed and the school provides a financial aid offer. Check with your school’s financial aid office for specific deadlines.
Summary
The parent PLUS loan interest rate for 2026-27 is 8.05%, fixed for the life of the loan. This rate is determined annually by a federal formula. While the rate is higher than some private loans, parent PLUS loans offer federal protections like deferment and forbearance. To minimize costs, consider paying interest during school, using autopay, and making extra principal payments. If you choose to refinance, be aware of losing federal benefits. Always stay informed by checking the official Federal Student Aid website for the most current rates and fees.
Frequently Asked Questions
What is the current interest rate for a parent PLUS loan?
For loans disbursed between July 1, 2026, and June 30, 2027, the interest rate is 8.05% fixed.
Is the parent PLUS loan interest rate fixed or variable?
The parent PLUS loan interest rate is fixed for the entire life of the loan, so it will not change over time.
How often does the parent PLUS loan interest rate change?
The rate is set each year for loans disbursed in that award year, but it remains fixed for each individual loan once disbursed.
Can I get a lower interest rate on a parent PLUS loan?
You can reduce your effective interest cost by setting up automatic payments to get a 0.25% rate reduction, but the base rate is set by law and cannot be negotiated.
What is the origination fee for a parent PLUS loan?
For loans disbursed from October 1, 2020, through September 30, 2026, the origination fee is 4.228% of the loan amount.
