What Is a Parent PLUS Loan?

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Many students today must turn to student loans to afford their college education. Unfortunately, the loans a student can borrow aren’t always sufficient to cover the full price tag. A Parent PLUS Loan can help parents fill the gap for their child.

These federal student loans allow you to borrow money for your child’s education. They don’t come with all the same perks as other federal loans, but they have some advantages.

Here’s what you need to know about Parent PLUS Loans:

What is a Parent PLUS Loan?
How does a Parent PLUS Loan work?
How to apply for a Parent PLUS Loan
Parent PLUS Loans vs. private student loans
What happens if you don’t repay a Parent PLUS Loan?

What is a Parent PLUS Loan?

A Parent PLUS Loan is a federal student loan available to parents of college students. They’re designed to cover any expenses — up to the full cost of attendance — that aren’t covered by any financial aid the student received.

To qualify for a Parent PLUS Loan, you must:

Be the parent of a dependent undergraduate student attending an eligible school at least half-time
Have good credit history
Meet the federal student aid eligibility requirements

Like other federal student loans, Parent PLUS Loans have fixed interest rates that are set for each school year. Unfortunately, these loans tend to have higher interest rates than other federal loans.

While the amount students can borrow in federal loans is limited, Parent PLUS loans allow you to borrow up to the full cost of attendance for your child’s education. They’re often used in combination with other student loans.

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How does a Parent PLUS Loan work?

A Parent PLUS Loan is one of a few types of Direct PLUS Loans available from the federal government. These loans work differently than other federal loans because of the borrowing requirements.

Rather than being in the student’s name — as other federal student loans are — Parent PLUS Loans are in the parent’s name, and the parent is ultimately the one responsible for repaying the loan.

In most cases, federal student loans don’t require a credit check. But for Parent PLUS Loans and other Direct PLUS Loans, a borrower must have a good credit history to qualify. You’ll have to go through a credit check in order to get a Parent PLUS Loan.

Keep in mind: Most federal student loans have loan fees. These are typically a percentage of the principal amount that you borrow. Your loan servicer will deduct the fee from your payout amount each time you receive a disbursement to pay school expenses.

Interest on Parent PLUS Loans

Like other federal loans, a Parent PLUS Loan can be deferred while the student is in school at least half-time. But unlike other federal student loans, Parent PLUS Loans don’t have a grace period after the student leaves school. You can request a six-month deferment, though, after the student leaves school.

Once the student graduates, drops below half-time enrollment, or leaves school for any reason, the loan will go into repayment. At that time, any unpaid accrued interest will capitalize, meaning it’s added to the principal balance and also begins to accrue interest.

Tip: If you’re able to make interest-only payments while the student is in school, you can prevent your Parent PLUS Loan from getting bigger before they graduate.

Our student loan repayment calculator can help you understand how interest will accrue on your Parent PLUS Loan. Enter your loan information into the calculator below to find out how long it will take to pay off your student loans. Use the slider to see how increasing your payments can change the payoff date.

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How to apply for a Parent PLUS Loan

If you’re considering applying for a Parent PLUS Loan for your child, follow these steps:

Have your child complete the FAFSA. Just like any other federal financial aid, a Parent PLUS Loan requires completion of the FAFSA. This form allows you and your child to share important information about your financial situation, which is used to determine what aid, if any, your child qualifies for.
Fill out the Parent PLUS Loan application. In addition to completing the FAFSA, you’ll also have to apply specifically for the PLUS Loan. On this application, you’ll provide information about your child’s school and the loan amount you’re requesting, and you’ll agree to a credit check.
Sign the repayment agreement. Once you’ve completed the application for your Parent PLUS Loan and have been approved, you’ll have to sign the Master Promissory Note, just as you would with any federal student loan. When you sign this note, you agree to the terms of the loan and its repayment.
Prepare for repayment. Even if you don’t plan to make payments on your Parent PLUS Loan while your child is in school, it’s never too early to start thinking about repayment. Remember that you can also start making payments right away to reduce the amount of interest that accrues.

The companies in the table below are Credible’s approved partner lenders. Whether you’re the borrower or cosigner, Credible makes it easy to compare rates from multiple private student loan providers without affecting your credit score.

Lender	Fixed Rates From (APR)	Variable Rates From (APR)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.48%+¹⁰	6.15%+¹⁰
Fixed APR: 4.48%+¹⁰ Variable APR: 6.15%+¹⁰ Min. credit score: Does not disclose Loan amount: $2,001* to $400,000 Loan terms (years): 5, 7, 10, 12, 15, 20 Repayment options: Full deferral, fixed/flat repayment, interest only, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: 0.25% to 1.00% automatic payment discount, 1% cash back graduation reward Eligibility: Must be a U.S. citizen or permanent resident or DACA student enrolled at least half-time in a degree-seeking program Customer service: Email, phone Soft credit check: Yes Cosigner release: After 12 on-time principal and interest payments Loan servicer: Launch Servicing, LLC
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.43%+¹	5.81%+
Fixed APR: 4.43%+¹ Variable APR: 5.81%+ Min. credit score: 720 Loan amount: $1,000 to $350,000 Loan terms (years): 5, 10, 15 Loan types: Any private or federal student loan Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay, loyalty Eligibility: Available in all 50 states (international students can apply with a creditworthy U.S. citizen or permanent resident cosigner) Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 36 months Loan servicer: Firstmark Services
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.41%+^2,3	5.49%+^2,3
Fixed APR: 4.41%+^2,3 Variable APR: 5.49%+^2,3 Min. credit score: Does not disclose Loan amount: $1,000 up to cost of attendance Loan terms (years): 5, 8, 10, 15, 20 Repayment options: Full deferral, full monthly payment, fixed/flat repayment, interest only, immediate repayment, academic deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and be making satisfactory academic progress. Customer service: Email, phone Soft credit check: Yes Cosigner release: After 24 months Loan servicer: College Ave Servicing LLC
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.43%+	5.37%+
Fixed APR: 4.43%+ ¹¹ Variable APR: 5.37%+ ¹¹ Loan amount: $1,000 to $99,999 annually ($180,000 aggregate limit)¹¹ Loan terms (years): 7, 10, 15¹¹ Repayment options: Full deferral, immediate repayment, interest-only repayment, flat/full repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay¹¹ Eligibility: Available to borrowers in all 50 states. Must be a U.S. citizen or permanent resident. Customer service: Phone, email Soft credit check: Yes Cosigner release: After 36 months¹¹ Loan servicer: American Education Services Min. income: $1
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	6.25%+⁷	8.11%+⁷
Fixed APR: 6.25%+⁷ Variable APR: 8.11%+⁷ Min. credit score: 750 Loan amount: $1,000 to $200,000 Loan terms (years): 7, 10, 15 Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and have a minimum income of $30,000. Customer service: Email, phone Soft credit check: Yes Cosigner release: After 36 months Loan servicer: Granite State Management & Resources (GSM&R)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.6%+⁸	7.64%+⁸
Fixed APR: 4.6%+⁸ Variable APR: 7.64%+⁸ Min. credit score: 670 Loan amount: $1,001 up to cost of attendance Loan terms (years): 5, 10, 15 Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, forbearance Fees: Late fee Discounts: Autopay, reward for on-time graduation Eligibility: Must be an Indiana resident or a U.S. citizen attending an eligible Indiana school Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 12 months Loan servicer: American Education Services
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.35%+	N/A
Fixed APR: 5.35%+ Variable APR: N/A Min. credit score: 670 Loan amount: $1,500 up to cost of attendance less aid Loan terms (years): 10, 15 Repayment options: Full deferral, interest only, immediate repayment, academic deferral, forbearance Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident and be making satisfactory academic progress. Customer service: Email, phone Soft credit check: Yes Cosigner release: After 48 months Loan servicer: American Education Services (AES)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.50%⁹ - 15.49%⁹	6.37%⁹ - 16.70%⁹
Fixed APR: 4.50%⁹ - 15.49%⁹ Variable APR: 6.37%⁹ - 16.70%⁹ Min. credit score: Does not disclose Loan amount: $1,000 up to 100% of school-certified cost of attendance Loan terms (years): 10 to 20⁹ Repayment options: Full deferral, fixed/flat repayment, interest only, academic deferment, forbearance, loans discharged upon death or disability Fees: Late fee, non-sufficient funds (NSF) fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident. Also available to non-U.S. citizen students (including DACA students) attending a school located in the U.S. who apply with a qualifying cosigner. Customer service: Phone, chat Soft credit check: Yes Cosigner release: Borrowers can apply after graduation, 12 consecutive on-time principal and interest payments, and meeting certain credit requirements. Loan servicer: Sallie Mae
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Parent PLUS Loans vs. private student loans

Many students prefer to use Direct Subsidized and Direct Unsubsidized loans to cover their higher education costs. These loans come with certain benefits, including low interest rates and flexible repayment. Unfortunately, these loans aren’t always able to cover the full cost of college. And when that happens, students must resort to other loan options, such as Parent PLUS Loans or private student loans.

Private lenders make private student loans. Both Parent PLUS Loans and private student loans have pros and cons to consider.

Pros of Parent PLUS Loans

Parent PLUS Loans have fixed interest rates, meaning your rate and payment won’t increase during the life of the loan.
Parent PLUS Loans can become eligible for income-driven repayment (the Income-Contingent Repayment Plan) if they’re consolidated into a Direct Loan, which isn’t an option for private student loans.
Like other federal student loans, Parent PLUS Loans are eligible for Public Service Loan Forgiveness based on the employment of the borrower (in this case, the parent).

Cons of Parent PLUS Loans

Parent PLUS Loan interest rates are higher than other federal loans and many private student loans.
These loans have fees that are deducted from disbursements — similar to an origination fee. Many private student loans don’t have origination fees, though late payment fees and other fees may apply.
Parent PLUS Loans lack some benefits that come with other federal loans, including an automatic grace period and many income-driven repayment options.

Pros of private student loans

Private student loans often have lower interest rates than Parent PLUS Loans, especially for borrowers with good credit.
Many private lenders offer private student loans without origination fees.
Private student loans often come with longer repayment terms..

Cons of private student loans

Private student loans don’t always offer deferment or forbearance options.
Private student loans can have variable interest rates, meaning while the rate may be lower at the time you borrow the money, it can increase later on.
For borrowers with poor credit, the interest rate on a private student loan may be considerably higher than the interest rate on a Parent PLUS Loan.

What happens if you don’t repay a Parent PLUS Loan?

The consequences of not repaying a Parent PLUS Loan are similar to those for failing to pay back any other type of loan. Your loan will go into delinquency on the first day after you miss a payment and will remain that way until you catch up on your payments or make other arrangements (like deferment).

Once your Parent PLUS Loan has been delinquent for at least 90 days, your loan servicer will begin reporting it to the three major credit bureaus — Equifax, Experian, and TransUnion. At that point, it’ll appear on your credit report, which can negatively affect your credit score.

Parent PLUS Loan default

Once your Parent PLUS Loan has been delinquent for 270 days or more, you’re in default. When you’ve defaulted on the loan, the entire unpaid balance — including interest — immediately becomes due. You may also have your wages garnished, and your tax returns and other federal benefits may be withheld.

Defaulting on a loan can also have major long-term consequences for your credit. A default remains on your credit report for up to seven years. This may bring down your credit score, making it difficult to qualify for any other type of financing.

Keep in mind: With Parent PLUS Loans, the parent is the borrower, not the student. As a result, it’s the parent that’ll face the negative consequences.

Some parents agree to take on Parent PLUS Loans for their children with the understanding that their child will make the loan payments after they graduate. Unfortunately, no matter what you and your child agreed to, it’s ultimately you as the borrower that’s responsible for paying back the loan.

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About the author

Erin Gobler

Erin Gobler is a freelance personal finance writer with more than eight years of experience writing online. She’s passionate about making the financial services industry more accessible by breaking down complicated financial topics in simple terms.

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