Parent PLUS loans are federal student loans that parents can use to help pay for their child’s college education. They are available through the U.S. Department of Education’s Direct Loan Program. To get one, the parent must be the borrower, and the student must be enrolled at least half-time at an eligible school.
These loans can cover the remaining cost of attendance after other financial aid is applied. The parent is responsible for repaying the loan, even if the student does not graduate. Understanding how they work can help you decide if this is the right option for your family.
Who is eligible for a parent PLUS loan?
To qualify, the parent must be the biological or adoptive parent of a dependent undergraduate student. The student must be enrolled at least half-time at a school that participates in the federal student aid program. The parent must also be a U.S. citizen or eligible noncitizen.
The U.S. Department of Education will check the parent’s credit history. A credit check is required, but the parent does not need a strong credit score. The main requirement is that the parent cannot have an adverse credit history, such as a bankruptcy or foreclosure within the past five years.
How to apply for a parent PLUS loan
The application process is done online through the Federal Student Aid website. The parent must log in with their own FSA ID and complete the PLUS Loan application. The school must be listed on the application, and the school must have the student’s FAFSA on file.
After approval, the parent must sign a Master Promissory Note (MPN). This is a legal document that outlines the loan terms. The loan amount is sent directly to the school to pay for tuition, fees, and other charges. If there is any money left over, it is paid to the parent or the student, depending on the school’s policy.
Interest rates and fees
Parent PLUS loans have a fixed interest rate that is set each year for loans disbursed between July 1 and June 30. For the 2025-2026 academic year, the interest rate is 8.05%. There is also a loan fee, which is a percentage of the loan amount. For loans disbursed on or after October 1, 2025, the fee is 4.228%.
These rates and fees are established by Congress and can change each year. It is important to check the current rates before applying. The table below shows the interest rates and fees for recent years.
| Academic Year | Interest Rate | Loan Fee |
|---|---|---|
| 2023-2024 | 8.05% | 4.228% |
| 2024-2025 | 9.08% | 4.228% |
| 2025-2026 | 8.05% | 4.228% |
Interest begins accruing as soon as the loan is disbursed. This means interest will build while the student is in school. If the parent does not pay the interest during school, it will be added to the loan balance when repayment begins.
Repayment options
Parent PLUS loans are eligible for several repayment plans. The standard plan has a 10-year term with fixed monthly payments. There are also income-contingent repayment plans that base monthly payments on the parent’s income. However, not all income-driven plans are available for parent PLUS loans.
One option is the Income-Contingent Repayment (ICR) plan, which requires the parent to consolidate the loan into a Direct Consolidation Loan first. This plan can lower monthly payments but may extend the repayment term beyond 10 years. Another option is to request a deferment while the student is in school, but interest continues to accrue.
Here are some key points about repayment:
- Repayment begins within 60 days after the loan is fully disbursed, unless the parent requests a deferment.
- The standard repayment term is 10 years, but the term can be extended up to 25 years under ICR.
- There is no prepayment penalty, so you can pay off the loan early to save on interest.
- If the parent dies or becomes permanently disabled, the loan can be discharged.
Pros and cons of parent PLUS loans
Parent PLUS loans can be a helpful tool, but they have both advantages and drawbacks. On the positive side, they can fill the gap between financial aid and the full cost of attendance. They also have federal protections, such as deferment and forbearance options.
However, the interest rates are higher than other federal student loans. The loan fee is also significant. Additionally, the parent is legally responsible for repayment, and the loan cannot be transferred to the student. If the parent struggles to pay, it can affect their credit.
Alternatives to parent PLUS loans
Before taking out a parent PLUS loan, consider other options. The student may qualify for a federal Direct Subsidized or Unsubsidized Loan, which have lower interest rates. Scholarships and grants are also worth exploring, as they do not need to be repaid.
Private student loans are another option, but they often have variable interest rates and fewer protections. Compare all options carefully to find the best fit for your family’s financial situation.
Practical summary
Parent PLUS loans are a federal option for parents to help pay for college. They require a credit check, have a fixed interest rate, and come with a loan fee. Repayment begins soon after disbursement, but you can request a deferment while the student is enrolled.
Before applying, review the interest rates and fees for the current year. Consider alternatives like federal student loans or scholarships. If you decide to take a parent PLUS loan, make a plan for repayment to avoid financial stress.
Frequently Asked Questions
Can parent PLUS loans be forgiven?
Parent PLUS loans can be forgiven under certain conditions, such as the parent’s death or permanent disability, or through the Public Service Loan Forgiveness program if the parent works for a qualifying employer and makes 120 qualifying payments.
Can a parent PLUS loan be transferred to the student?
No, a parent PLUS loan cannot be transferred to the student. The parent is the borrower and is responsible for repayment, though the student may voluntarily make payments.
What is the maximum amount I can borrow with a parent PLUS loan?
The maximum amount you can borrow is the cost of attendance minus any other financial aid the student receives. There is no annual limit, but the loan cannot exceed the school’s certified cost of attendance.
How long does it take to get approved for a parent PLUS loan?
Approval is usually immediate after you submit the application online, provided you meet the credit requirements. The funds are then sent to the school, typically within a few weeks.
What happens if my parent PLUS loan application is denied?
If your application is denied, you can appeal the credit decision or add an endorser (a co-signer) to the loan. If you are still denied, the student may be eligible for additional unsubsidized federal loans.
