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Part of the Series Paying for College GuideSaving for College
Scholarships and Grants: Free Money
Types of Student Loans
What Loans Cost
Decoding Student Aid Offers
Best Student Loans
A PLUS loan, also known as a direct PLUS loan, is a federal loan for higher education available to the parents of undergraduate students as well as graduate or professional students. PLUS stands for Parent Loan for Undergraduate Students.
Like other federal student loans (and unlike private loans), PLUS loans are offered through the United States Department of Education's William D. Ford Federal Direct Loan Program. The government itself is the lender, hence the name "direct" loans.
For their parents to be eligible for a PLUS loan, students must be enrolled at least half-time in a school that participates in the Federal Direct Loan Program.
PLUS loan money first goes to the educational institution, which applies it to expenses including tuition, room and board, and fees. Any remaining funds are disbursed directly to the parent or to the student.
PLUS loans carry a fixed interest rate for their entire term. For example, loans disbursed on or after July 1, 2024, and before July 1, 2025, have an interest rate of 9.08%.
Payments and interest on federal student loans were suspended in 2020 during the pandemic. Loan payments and interest resumed in October 2023.
To apply for a PLUS loan, students and their parents must fill out the Free Application for Federal Student Aid (FAFSA). The parent must also pass a standard credit check. Students who are working toward a graduate or professional degree at an eligible school can apply for PLUS loans on their own behalf. Such loans are often referred to as a grad PLUS loan, as opposed to a parent PLUS loan.
For a parent PLUS loan, the student must be a dependent of the parent—biological or adoptive—or, in some cases, a stepparent or grandparent. Parents and students must both meet the general eligibility requirements for student aid, such as being a U.S. citizen or permanent resident alien, and the parent must not have an adverse credit history.
If the parent has an adverse credit history, they may still qualify if they can obtain an endorser for the loan—or indicate extenuating circumstances for their poor credit score. When parents can't qualify for a PLUS loan, their children may be eligible for student loans with larger limits.
Grad PLUS loans have the same eligibility requirements, except that they apply to just the student.
By requesting a deferment, you can postpone repaying your PLUS loan until after the student graduates.
Payment on a PLUS loan must generally begin once the entire loan has been disbursed. You can either start repaying your loans while the student is still in school or request a deferment. With a deferment, you won't need to make payments while the student is enrolled at least half-time or for an additional six months after the student graduates, leaves school, or drops below half-time enrollment.
Interest will continue to accrue during that time, however, and will be added to the loan's balance. The Education Department offers several repayment plans for parent PLUS loans, including:
In the case of grad PLUS loans, borrowers may have additional options, including IDR plans that base their monthly payment on their income and family size. Generally, grad PLUS borrowers have 10 to 25 years to repay their loans, depending on the repayment plan they choose.
The "PLUS" in these federal higher-education loans' name stands for Parent Loan for Undergraduate Students.
Yes. A direct PLUS loan made to you as a parent can't be transferred to your child. You're responsible for repaying the loan. Under some circumstances, however, you may receive a deferment or forbearance, which allows you to temporarily stop or lower your payments.
Grad PLUS loans let graduate and professional students borrow money to pay for their own education, rather than requiring their parents to borrow the funding. Graduate students can use grad PLUS loans to cover any costs not already covered by other financial aid or grants, up to the full cost of attendance. There's no cumulative limit to how much graduate students may borrow.
PLUS loans are federal direct loans for the parents of college students, and these loans are also available for graduate and professional students. A PLUS loan allows you to borrow up to the full cost of college, minus any other financial aid. As with other federal student loans, PLUS loans offer a variety of flexible repayment plans. Keep in mind that interest rates on PLUS loans are relatively low, but they're not as low as those on federal student loans.
Article SourcesSaving for College
Scholarships and Grants: Free Money
Types of Student Loans
What Loans Cost
Decoding Student Aid Offers
Best Student Loans
From 1958–2017, Perkins loans provided low-interest loans to undergraduate and graduate students with exceptional financial needs.
A direct consolidation loan is a type of direct loan that combines two or more federal education loans into a single loan.
Student loan forgiveness is a release from having to repay the borrowed sum, in full or in part. There are currently several ways to attain student loan forgiveness for federal student loans.
The Saving on a Valuable Education (SAVE) plan is an income-driven repayment (IDR) plan introduced by the Biden Administration that replaces the Revised Pay As You Earn (REPAYE) plan.
A Coverdell education savings account is a trust that assists families with educational expenses.If you have federal student loans, you have several repayment options. An IDR plan allows you to make payments based on your income and family size, ensuring you pay what you can afford.
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