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PLUS Loans

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.

Borrowing Limits

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.

Loan Repayment

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.

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Last Reviewed: February 2020