The Parent Loan for Undergraduate Students or PLUS Loan is for parents of dependent undergraduate students and graduate or professional school students. PLUS Loans are affordable and have low interest rates. These loans are insured by the federal government. Schools that participate in the William D. Ford Federal Direct Loan (Direct Loan) Program offer PLUS Loans.
The maximum amount borrowed cannot exceed the total cost of attendance minus financial aid received. For example, if the cost of attendance is $6,000 and a student gets $4,000 in financial aid, they can borrow up to $2,000. The cost of attendance includes tuition and fees, room and board, books and supplies, transportation, and miscellaneous educational expenses. The school determines and certifies the amount.
Interest Rates and Fees
- -The interest rate for Direct PLUS Loans disbursed on or after July 1, 2015, and before July 1, 2016, is 6.84%. Interest rates are fixed for the life of the loan.
- In addition to interest, there is a loan fee on all Direct PLUS Loans. A percentage of the loan deducted from each disbursement to pay the fee. The percentage varies depending on when the loan is first disbursed. The fee for loans disbursed on or after October 1, 2014, and before October 1, 2015 was 4.292% and is 4.272% for loans disbursed on or after October 1, 2015, and before October 1, 2016.
Your Direct PLUS Loan enters repayment once your loan is fully disbursed (paid out).
However, if you are a graduate or professional student, your loan will be placed into deferment while you are enrolled at least half-time and for six months after you are no longer enrolled at least half-time.
If you are a parent borrower, contact your loan servicer to request deferment:
- - while you or your child are enrolled at least half-time and
- - for an additional six months after your child is no longer enrolled at least half-time.
Interest still accumulates during deferment. You can pay off the interest during deferment. Your loan servicer will notify you when your first payment is due.
What else should I know about PLUS Loans?
PLUS Loans can be cancelled or forgiven. Before your money is disbursed, you can cancel part or all of your loan by notifying your college. After the loan is disbursed, you can cancel part or all of the loan within a specific time frame. Your promissory note and information from your school will explain the procedures and time frames for canceling your loan. You can also qualify for forgiveness of some or all of the loan if you meet certain conditions.
Parent borrowers cannot transfer a Direct PLUS Loan to the child. The parent is responsible for repaying the loan.
Last Reviewed: March 2017
Latest College & Financial Aid News
March 28, 2017
by Susan Dutca
The Princeton Review’s 2017 College Hopes & Worries survey reveals that biggest worry for students and parents is the "level of debt I/my child will take on to pay for the degree." While this concern doesn’t come as a surprise, it differs greatly from the average woe a decade ago; not "getting in to [a] first-choice college." [...]
March 24, 2017
by Susan Dutca
What do spring college scholarships bring? Potentially thousands of dollars in free college money to help foot your college tuition bill! Whether you are relaxing over spring break or heavy into spring cleaning, don't forget to do your academic and financial aid housekeeping. Explore these spring-centric awards, as well as college scholarships with spring 2017 deadlines. Or if you prefer, conduct your own free college scholarship search here: [...]
March 21, 2017
by Susan Dutca
Finding a way to pay for college is a whole mess in itself. Add to that the stress of filling out a FAFSA and now, the removal of a key I.R.S. tool that made the process somewhat less difficult, and you have millions of students in limbo, panicking about how they will pay for college. [...]