What Is a Parent PLUS Loan? 2026 Guide

Federal parent PLUS loans have long helped families close college funding gaps, but they’re becoming a more limited and consequential borrowing option. As new rules reshape how much parents can borrow and how they can repay, families may need to plan earlier, compare more options, and be clear about what they can afford.

Current private student loan rates

What is a parent PLUS loan?

A parent PLUS loan is a federal student loan available to parents to help pay education costs for their dependent undergraduate children. For years, these loans have helped fill funding gaps after grants, scholarships, savings, work-study, and the maximum amount of the student's own federal loans were applied. Parents could generally borrow the remaining amount needed to cover the school’s full cost of attendance.

That framework is changing.

Parent PLUS borrowing limits

The amount parents can borrow through the PLUS loan program depends on the timeline. Rules taking effect July 1, 2026, will determine your loan limits.

• Loans disbursed before July 1, 2026: Under pre-July 2026 rules, an eligible parent can generally borrow up to the student's cost of attendance, minus any other financial aid the student receives. The school determines the cost of attendance and certifies the amount a parent can borrow.
• Loans disbursed on or after July 1, 2026: Starting with the 2026-27 school year, new rules establish parent PLUS loan limits. Parents may borrow as much as $20,000 per dependent student per year, with a lifetime limit of $65,000 per student.

An exception to the rule allows parents to continue borrowing up to the cost of attendance minus other aid using PLUS loans if the dependent undergraduate student was enrolled in the same institution and program before the cutoff date, and at least one federal student loan was taken out for that program. The Department of Education says the school ultimately determines whether the child qualifies for the exception and how much the parent may borrow.

“As an overall message, the new law has significantly changed how families save and pay for college,” says Jack Wang, a wealth adviser at Innovative Advisory Group and host of the Smart College Buyer podcast. He notes that families with children who are just starting college and need to borrow to pay for those programs are likely to feel the biggest impact.

How to cover funding gaps after reaching parent PLUS loan limits

Families that need to cover a remaining balance after exceeding their limits on federal and free financial aid may be able to use private student loans.

In May 2026, fixed-interest APRs for loans available through the Credible student loan marketplace range from 2.54 to 17.99, with variable APRs from 3.65 to 17.99 for qualified borrowers. The rates you’ll be offered depend on the lender, loan type, repayment term, credit profile, income, and whether you apply with a cosigner.

Private loans can be useful when federal borrowing does not cover the full cost or when a highly qualified borrower can secure a lower rate. But they do not come with the same federal benefits, such as income-driven repayment plans, federal forgiveness programs, and generous deferment or forbearance options.

Who is eligible for a parent PLUS loan?

To take out a parent PLUS loan, the borrower must generally be the biological or adoptive parent of the student whose education the loan supports. A stepparent may be eligible in some situations, but grandparents and legal guardians are not eligible unless they have legally adopted the student.

The student must be enrolled at least half-time in an undergraduate program at a school that participates in the federal Direct Loan program. Both the parent borrower and the student must also meet general federal student aid eligibility requirements, such as U.S. citizenship or eligible noncitizen status.

Parent PLUS loans require a credit check for adverse credit, such as a bankruptcy or foreclosure. There is no credit score requirement.

If you have adverse credit, you may still qualify by completing additional steps, such as obtaining an endorser — the equivalent of a cosigner for private student loans — documenting extenuating circumstances to appeal the credit decision, and completing credit counseling.

How to apply for a parent PLUS loan

Most schools use the online PLUS loan application, but some schools have a different process. Check with the financial aid office before applying so you know which form, deadline, and school-specific steps apply.

1. Submit the student's FAFSA: Your child should complete the Free Application for Federal Student Aid before you apply for a parent PLUS loan.
2. Confirm the school's process: Some institutions require a school-specific PLUS loan request or additional forms.
3. Lift any credit freezes: If your credit file is frozen, remove the freeze at each credit bureau before the PLUS credit check.
4. Complete the PLUS loan application: Be prepared with your parent FSA ID, personal information, employer information, the student's information, the school name, and the requested loan amount.
5. Consent to the credit check: The application requires a credit check for adverse credit.
6. Wait for school certification: The school uses the information you provide to determine eligibility and process the loan amount.
7. Sign the Master Promissory Note (MPN): The MPN is a legal document in which you promise to repay the loan, including any accrued interest and fees. You may need a separate MPN if you borrow for more than one child.

What are the parent PLUS loan interest rates?

For parent PLUS loans first disbursed on or after July 1, 2025, and before July 1, 2026, the fixed interest rate is 8.94%. PLUS loans also have a loan fee that is proportionately deducted from each disbursement. For loans first disbursed on or after Oct. 1, 2020, and before Oct. 1, 2026, that fee is 4.228%.

Federal student loan rates are set for each award year and are fixed for the life of that loan. Loans first disbursed on or after July 1, 2026, may have a different rate once the Department of Education publishes the 2026-27 rate.

Parent PLUS loan repayment generally begins after the loan is fully disbursed. Borrowers may request a repayment deferment while the student is enrolled at least half-time and for up to six months after the student graduates, leaves school, or drops below half-time enrollment. Interest continues to accrue during deferment.

How do parent PLUS loans compare with private parent loans?

Private parent loans are an alternative to parent PLUS loans. They can offer lower interest rates to highly qualified borrowers, and many do not charge federal-style origination fees. However, private loans are credit-based and generally do not include income-driven repayment or the same deferment and forbearance protections as federal loans.

“Note that the parent PLUS loan has a 4.288% fee, which is the equivalent of an interest rate that is a full percentage point higher on a 10-year repayment term,” says Mark Kantrowitz, a college financing expert and author of books on how to get financial aid. “So, add 1% to the interest rate on the parent PLUS loan when comparing it with the interest rate on the private student loan, which usually has no fees.”

Pros and cons of parent PLUS loans

Parent PLUS loans can be convenient, but the value of the loan depends on the family's cash flow, credit profile, college choice, and repayment plan. Here are the main trade-offs.

Mark Kantrowitz, author of “How To Appeal for More College Financial Aid,” explains that the origination fee on parent PLUS loans significantly adds to the cost of borrowing compared with private loans.

“Note that the parent PLUS loan has a 4.288% fee, which is the equivalent of an interest rate that is a full percentage point higher on a 10-year repayment term,” he says. “So, add 1% to the interest rate on the parent PLUS loan when comparing it with the interest rate on the private student loan, which usually has no fees.”