What Is A Parent Plus Loan?

Are you a parent looking for financial assistance to help cover the cost of your child’s college education? If so, you’ve come to the right place! In this blog post, we’ll be diving into the world of Parent PLUS Loans – a popular option for parents who need additional funds to support their child’s higher education journey.

Whether you’re new to the concept or just need a refresher, we’ve got you covered. We’ll walk you through what exactly a Parent PLUS Loan is and how it can benefit both you and your child. So sit back, relax, and get ready to explore all things related to Parent PLUS Loans!

What is a Parent PLUS Loan?

A Parent PLUS Loan is a type of federal student loan available to parents who want to help finance their child’s education. It’s designed specifically for parents and allows them to borrow money directly from the U.S. Department of Education.

Unlike other federal student loans, such as Stafford Loans or Perkins Loans, which are taken out by students themselves, Parent PLUS Loans are taken out by the parent on behalf of their dependent undergraduate student. This means that it’s the parent who assumes responsibility for repaying the loan, not the student.

Parent PLUS Loans offer several advantages over private loans, including fixed interest rates and flexible repayment options. These loans can be used to cover a variety of educational expenses, including tuition fees, room and board costs, textbooks, and even transportation expenses.

To qualify for a Parent PLUS Loan, you must meet certain eligibility requirements. This includes being a biological or adoptive parent (or in some cases a stepparent) of an eligible undergraduate student enrolled at least half-time in an accredited college or university. You should also have no adverse credit history or outstanding defaults on any previous federal education loans.

Applying for a Parent PLUS Loan is relatively straightforward. You’ll need to complete the Free Application for Federal Student Aid (FAFSA) form and then submit an application specifically for the Parent PLUS Loan through your child’s school financial aid office.

How to Apply for a Parent PLUS Loan?

Applying for a Parent PLUS Loan is relatively straightforward, but it’s important to ensure you meet the necessary requirements before starting the process. To apply for this loan, you will need to complete the Free Application for Federal Student Aid (FAFSA) form, which can be done online at fafsa.gov. Make sure to include your child as a dependent on the FAFSA if they are still in school.

Once you have completed the FAFSA, you can then proceed with applying for a Parent PLUS Loan. The application process involves filling out an electronic application called the Direct PLUS Loan Application and Master Promissory Note (MPN) at studentaid.gov. You will need to provide personal and financial information during this step.

After submitting your application, it will undergo credit check evaluation by the U.S. Department of Education. If approved, you will receive a notification along with instructions on how to complete entrance counseling and sign your MPN.

It’s worth noting that each year requires a new loan application and credit check since eligibility is determined annually based on factors such as income and credit history.

Applying for a Parent PLUS Loan involves completing the FAFSA form followed by submitting an electronic application and undergoing a credit check evaluation. It’s crucial to stay informed about deadlines and requirements throughout each step of the process.

What are the Eligibility Requirements for a Parent PLUS Loan?

Eligibility requirements for a Parent PLUS Loan can play a crucial role in determining whether or not you qualify for this type of federal student loan. Here’s what you need to know.

  • First and foremost, to be eligible for a Parent PLUS Loan, you must be the biological or adoptive parent of an undergraduate dependent student enrolled at least half-time at an eligible institution. Keep in mind that stepparents may also apply if their information is included on the Free Application for Federal Student Aid (FAFSA).
  • In addition to the relationship requirement, you must meet certain basic eligibility criteria. This includes being a U.S. citizen or eligible noncitizen and not having any adverse credit history. Adverse credit history is defined as having significant delinquencies, bankruptcies, foreclosures, tax liens, wage garnishments, or defaulting on previous federal student loans.
  • Unlike other types of federal student loans, there are no specific income requirements for obtaining a Parent PLUS Loan. However, it’s important to note that your ability to repay the loan will still be considered during the application process.
  • To apply for a Parent PLUS Loan, you’ll need to complete the online application form available through the Federal Student Aid website. You’ll also have to undergo a credit check as part of the application process.
  • It’s important to carefully consider your financial situation before applying for a Parent PLUS Loan because repayment responsibilities fall solely on parents rather than students. Make sure you understand all aspects of this loan option before committing yourself financially.

Understanding and meeting the eligibility requirements for a Parent PLUS Loan is essential if you’re considering this option as part of your college funding strategy. Take time to evaluate your circumstances and consult with financial aid professionals who can provide guidance tailored specifically to your needs.

How Much Can You Borrow with a Parent PLUS Loan?

How much can you borrow with a Parent PLUS Loan? This is an important question for many parents considering this type of loan to help finance their child’s education. The answer depends on several factors.

  • It’s worth noting that there is no set maximum limit on the amount you can borrow with a Parent PLUS Loan. However, the loan amount cannot exceed the cost of attendance minus any other financial aid received by your child.
  • The cost of attendance includes tuition fees, room and board, textbooks, and other educational expenses. It may also take into account transportation costs and personal expenses while attending school.
  • When determining how much to borrow, it’s crucial to consider your own financial situation and ability to repay the loan in the future. Remember that a Parent PLUS Loan is taken out in your name as the parent borrower, so you will be responsible for repaying it.
  • It’s recommended to carefully evaluate your budget and only borrow what you need. Taking out more than necessary could result in higher interest payments over time.
  • While there is no strict borrowing limit for a Parent PLUS Loan, it’s crucial to assess your financial circumstances before deciding on an appropriate loan amount. Consider all aspects involved in financing your child’s education and aim to strike a balance between meeting their needs without burdening yourself with excessive debt.

What is the Interest Rate on a Parent PLUS Loan?

When it comes to financing your child’s education, it’s important to consider all of your options. One such option for parents is the Parent PLUS Loan, which can help bridge the gap between what federal student aid covers and the cost of tuition.

  • One key factor to keep in mind when considering a Parent PLUS Loan is the interest rate. The interest rate on these loans is fixed, meaning it will not change over time. Currently, for new loans disbursed after July 1st, 2021, and before July 1st, 2022, the interest rate stands at 6.28%.
  • It’s worth noting that this interest rate may vary from year to year as it is determined by Congress each spring. This means that if you are considering taking out a Parent PLUS Loan in future years, be sure to check for any updates or changes in rates.
  • The interest on a Parent PLUS Loan begins accruing as soon as funds are disbursed and continue throughout the life of the loan until it has been fully repaid.
  • Understanding the interest rate on a Parent PLUS Loan is essential for making informed decisions about financing your child’s education. Be sure to weigh this information alongside other factors like loan repayment terms and alternative options before making your final decision.

Alternatives to Parent PLUS Loans

  1. Private Student Loans: If you’re unable to secure a Parent PLUS Loan or need additional funding, private student loans can be an alternative. These loans are offered by banks and other financial institutions and typically require a credit check. Interest rates and terms vary, so it’s important to research and compare options before making a decision.
  2. Co-signer Options: If your credit history isn’t strong enough to qualify for a loan on your own, consider asking a family member or friend with good credit to co-sign the loan application. This can increase your chances of approval and potentially result in more favorable interest rates.
  3. Scholarships and Grants: Explore scholarship opportunities that can help reduce the overall cost of education. Many organizations offer scholarships based on academic achievement, extracurricular involvement, or specific areas of study.
  4. Federal Work-Study Program: The Federal Work-Study (FWS) program provides part-time employment opportunities for students with financial need. By working on-campus or at approved off-campus locations, students can earn money towards their educational expenses while gaining valuable work experience.
  5. College Payment Plans: Some colleges offer payment plans that allow families to spread out tuition payments over several months instead of paying one lump sum upfront. This option may not involve borrowing any additional funds but requires careful budgeting and planning ahead.

Remember that every family’s situation is unique, so what works for one may not work for another when exploring alternatives to Parent PLUS Loans.


Parent PLUS Loans can be a valuable resource for parents who want to help their children afford the cost of higher education. With these loans, parents can borrow funds to cover any remaining costs after other financial aid has been exhausted.

Applying for a Parent PLUS Loan is a relatively straightforward process, and eligibility requirements are not as strict as they are for other types of federal student loans. The amount that can be borrowed through the program varies depending on the cost of attendance at the school your child will be attending.

It’s important to consider the interest rate on Parent PLUS Loans, which is typically higher than rates offered on other federal student loans. However, these loans do offer flexible repayment options and forgiveness programs.

While Parent PLUS Loans can provide much-needed assistance, it’s also worth exploring alternative options such as private student loans or scholarships. Every family’s situation is different, so it’s essential to carefully evaluate all available avenues before making a decision.

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