Parent PLUS Loan

How to Apply for a Parent PLUS Loan

The application process is managed through the Department of Education and starts with the FAFSA®.

1. Complete the FAFSA®: The student and parent must complete the Free Application for Federal Student Aid (FAFSA). Schools use this to determine eligibility for all federal aid.
2. Review the Financial Aid Award: The school will send a financial aid letter detailing the total Cost of Attendance (COA) and the aid your child qualifies for. If a funding gap remains, a Parent PLUS Loan is a potential solution.
3. Submit the PLUS Loan Application: The parent borrower must complete the Direct PLUS Loan Application at StudentAid.gov using their own FSA ID.
4. Pass a Credit Check: The Department of Education conducts a credit check to look for an “adverse credit history.” According to StudentAid.gov, this includes having debts totaling more than $2,090 that are 90+ days delinquent, or having a bankruptcy, foreclosure, repossession, or wage garnishment within the last five years.

If the application is approved, the loan funds are sent to the school. The school applies the funds to tuition, fees, and room and board. Any leftover money, known as a student loan refund, is disbursed to the parent, who can then pass it to the student for other educational expenses.

Who Is Eligible for a Parent PLUS Loan?

Eligibility criteria apply to both the parent borrower and the student.

Parent Requirements:

• Must be the biological or adoptive parent (or in some cases, a stepparent) of a dependent undergraduate student.
• Must be a U.S. citizen or eligible noncitizen.
• Cannot have an adverse credit history. If you do, you may still qualify by obtaining an endorser (similar to a cosigner) or documenting extenuating circumstances.

Student Requirements:

• Must be a dependent undergraduate student.
• Must be enrolled at least half-time at an eligible school.
• Must meet the school’s Satisfactory Academic Progress (SAP) standards.

If you are denied a Parent PLUS Loan and cannot resolve it with an endorser, your child may become eligible to borrow additional funds through a Direct Unsubsidized Loan.

Borrowing Limits, Interest Rates, and Repayment

You can borrow up to the school’s full Cost of Attendance (COA) minus any other financial aid your child receives. While this flexibility can cover the entire funding gap, it’s critical to borrow only what you truly need.

Parent PLUS Loans have a fixed interest rate for life. For the 2024–2025 academic year, the interest rate is 9.08%. These loans also have an upfront loan fee, which is deducted from each disbursement. For loans disbursed before October 1, 2025, the fee is 4.228%.

Repayment typically begins 60 days after the loan is fully disbursed. However, you can request a deferment to postpone payments while your child is enrolled at least half-time and for an additional six months after they graduate or drop below half-time status. Keep in mind that interest accrues during deferment and will be capitalized (added to the principal balance) when repayment begins.

Can a Parent PLUS Loan Be Forgiven or Transferred?

This is a critical point of confusion for many families. A Parent PLUS Loan is in the parent’s name and cannot be transferred to the student. While you can have an informal agreement for your child to make payments, you remain legally responsible for the debt.

However, these loans are eligible for certain federal benefits. To access loan forgiveness programs like Public Service Loan Forgiveness (PSLF), you must first consolidate the Parent PLUS Loan into a Direct Consolidation Loan and then enroll in the Income-Contingent Repayment (ICR) plan. This is the only income-driven repayment plan available for consolidated Parent PLUS Loans.

Parent PLUS Loans vs. Private Parent Loans

It’s wise to compare all funding options, including private student loans.