Parent PLUS Loans: What to Know

Navigating college finances can feel overwhelming, but understanding your loan options is a great first step. One important option for many families is the Parent PLUS Loan — a federal loan designed to help parents support their children’s education.

What is a Parent PLUS Loan?

A Parent PLUS Loan is a type of federal student loan that parents of dependent undergraduate students can borrow to help pay for college expenses not covered by other financial aid. It can cover tuition, fees, room and board, and other education-related costs.

Who Can Apply?

Parents of dependent undergraduate students enrolled at least half-time in an eligible school can apply. Both biological and adoptive parents, and sometimes stepparents, may be eligible. The loan is taken out in the parent’s name, not the student’s.

Key Features of Parent PLUS Loans

• Loan Limits: Parents can borrow up to the total cost of attendance minus any other financial aid received.

• Interest Rates: The loan carries a fixed interest rate set by the government each year.

• Repayment: Repayment usually begins 60 days after the loan is fully disbursed, though parents can request to defer payments while the student is enrolled at least half-time.

• Credit Check: Unlike many other federal student loans, Parent PLUS Loans require a credit check. However, adverse credit history does not automatically disqualify applicants; there are options to appeal or obtain an endorser.

Things to Consider

• Since the loan is the parent’s responsibility, it’s important to carefully evaluate your ability to repay.

• Parent PLUS Loans do not offer as many flexible repayment plans as some student loans, so understanding the terms is crucial.

• Interest accrues during all periods, including deferment and forbearance, which means the total amount to repay can grow over time.

How to Apply

Applications are submitted online through the Federal Student Aid website. Parents will need to complete a PLUS Loan application and a Master Promissory Note (MPN) agreeing to the loan terms.

Helpful Tips

• Review your family’s budget and financial situation before borrowing.

• Compare Parent PLUS Loans with other financing options, including private loans or scholarships.

• Stay in contact with your loan servicer and keep track of payment deadlines.