How much is the parent PLUS loan?

The parent PLUS loan is a federal loan that parents of dependent undergraduate students can use to help pay for college. The amount you can borrow is not a fixed dollar figure; it is the cost of attendance (COA) minus any other financial aid the student receives. This means the maximum loan amount is determined by your child’s school, not by a set limit.

For the 2026-2027 academic year, the interest rate for parent PLUS loans is fixed at 8.05%, and there is a loan fee of 4.228% that is deducted from the loan before disbursement. These rates and fees are set by Congress and apply to loans disbursed on or after July 1, 2026, and before July 1, 2027. Because the loan fee is deducted upfront, the amount you actually receive will be slightly less than the total loan amount you borrow.

To get a parent PLUS loan, the parent must be the biological or adoptive parent of a dependent undergraduate student who is enrolled at least half-time. The parent must also have a good credit history, as a credit check is required. If the parent is denied, the student may be eligible for additional unsubsidized federal student loans, but the amount is typically limited to $4,000 to $5,000 per year.

How Is the Borrowing Amount Calculated?

The maximum amount you can borrow is the student’s cost of attendance minus any other financial aid, such as scholarships, grants, or other loans. The cost of attendance includes tuition, fees, room and board, books, supplies, transportation, and personal expenses. For example, if the COA is $30,000 and the student receives a $10,000 scholarship, the parent could borrow up to $20,000.

However, the school determines the exact amount you are eligible to borrow based on their own cost figures. You cannot borrow more than the COA, and you must apply for the loan through the school’s financial aid office. The loan is disbursed directly to the school, which applies it to the student’s account.

What Are the Costs of a Parent PLUS Loan?

Beyond the principal amount, you need to consider the loan fee and the interest that accrues. The loan fee is a percentage of the loan amount and is deducted from the loan proceeds. For loans disbursed between July 1, 2026, and June 30, 2027, the fee is 4.228%. This means if you borrow $10,000, you will receive about $9,577.20 after the fee is taken out.

Interest on a parent PLUS loan begins accruing immediately after the first disbursement, even while the student is still in school. This is different from subsidized loans, where the government pays interest during school. Because interest compounds, the total amount you repay can be significantly higher than the amount you borrowed.

As the table shows, parent PLUS loans have a higher interest rate and a higher fee than other federal student loans. This makes them more expensive, so it is wise to consider all options before borrowing.

How Much Can You Borrow Over Time?

There is no aggregate limit on parent PLUS loans. You can borrow a new loan each academic year as long as the student remains eligible. However, each loan is limited to the cost of attendance for that specific year. Over four years, the total could easily exceed $100,000 if the student attends a private college or university.

What If the Parent Is Denied?

If a parent is denied a PLUS loan due to an adverse credit history, the student can still receive additional unsubsidized loans. For dependent undergraduates, the annual limit is up to $5,500 for first-year students, $6,500 for second-year students, and $7,500 for third-year and beyond. These amounts include the standard unsubsidized loan limits, so the extra amount is limited to $4,000 or $5,000 per year.

Alternatively, the parent might be able to get an endorser (a co-signer) to help qualify. An endorser must pass a credit check and agrees to repay the loan if the parent does not. If the parent reapplies with an endorser, the loan can be approved.

What Are the Repayment Options?

Repayment for parent PLUS loans typically begins 60 days after the final loan disbursement for the academic year. However, you can request a deferment while the student is enrolled at least half-time and for six months after the student graduates, leaves school, or drops below half-time. During deferment, interest continues to accrue, and you may choose to pay it or let it capitalize.

The standard repayment plan has a 10-year term, but you can choose an income-contingent repayment plan that extends the term to 25 years and bases your monthly payment on your income. This can lower your monthly payment but increases the total interest paid. You can also consolidate parent PLUS loans into a Direct Consolidation Loan to access more repayment options.

How to Reduce the Cost

Before borrowing a parent PLUS loan, consider these steps:

• Maximize free aid like scholarships and grants, which do not need to be repaid.
• Encourage your student to work part-time to cover some expenses.
• Compare the parent PLUS loan with private student loans, which may offer lower rates for excellent credit.
• Borrow only what you need, not the maximum offered, to reduce fees and interest.

If you do take a parent PLUS loan, make payments during school or at least pay the interest to prevent it from capitalizing. Even small payments can reduce the total cost significantly.

Final Thoughts

So, how much is the parent PLUS loan? It can be as much as the full cost of attendance minus other aid, but the actual amount you borrow is up to you and the school’s determination. Remember that the loan fee and interest make the total cost higher than the sticker price. Always borrow conservatively and explore all other options first. If you do borrow, understand the repayment terms and consider paying interest early to save money over time.

Written by Cleveland ESDC Team

At Cleveland ESDC, we believe every student deserves access to clear information. We're here to help breaking down complex education topics into simple, practical guides anyone can use.