Federal Direct PLUS Loans: What You Should Know

Federal Direct PLUS Loans are a financing solution that can bridge the gap between a student’s awarded financial aid and a school’s cost of attendance. As many as 1.8 million graduate students held grad PLUS loans in the third quarter of 2025, according to Federal Student Aid data. The figure is nearly twice as high for parent PLUS loans, at 3.5 million. 

Here’s what to know about these loans, including Direct PLUS Loan eligibility and how to apply for PLUS loans.

Current private student loan rates

What are federal Direct PLUS Loans?

Federal Direct PLUS Loans are unsubsidized student loans available to graduate and professional-level students (grad PLUS loans) and to parents who are helping their dependent undergraduate student pay for school (parent PLUS loans). These loans are designed to help postgraduate students and parents cover school expenses that aren’t covered by other student aid.

The fixed federal PLUS loan interest rate for loans disbursed between July 1, 2025, and June 30, 2026, is 8.94%. A 4.228% origination fee also applies, which is automatically deducted before funds are disbursed. Each year, federal student loan rates are assessed and may change for new loans.

Who qualifies for PLUS loans?

The two federal Direct PLUS Loan types share many eligibility criteria. To qualify for a PLUS loan, you must:

• Not have adverse credit: If an adverse credit history is found during the required credit check, you might still be able to get a PLUS loan if you meet certain requirements. 
• Borrow within the allowable limit: You can borrow up to the school-certified cost of attendance, minus any financial aid you’ve already received for the school year. 
• Be enrolled: Graduate and professional students must be enrolled at least half-time for the term. For parent PLUS loan borrowers, the undergraduate student must meet the half-time enrollment criterion.
• Attend an eligible institution: The student must also be attending an eligible school in a program that awards a degree or certificate.

For parent PLUS loans, applicants must also be eligible parents, meaning a biological parent or legal adoptive parent of the undergraduate student. 

All PLUS loan borrowers are also required to meet the basic qualifications for federal student aid, which include: 

• Eligibility for enrollment: You must demonstrate that you’re qualified to earn a college or career school education (e.g., high school diploma or GED).
• Citizenship: You must be a U.S. citizen or an eligible noncitizen.
• Academic performance: All students who receive federal PLUS loans must maintain satisfactory academic progress, including staying on track to graduate and meeting the school’s GPA requirements.
• Good standing with other federal aid: You don’t have federal loans in default and aren’t required to repay a federal grant.

How to apply for a Direct PLUS Loan

Submitting an application for a federal Direct PLUS Loan is relatively straightforward and takes approximately 20 minutes. Here are the general steps you’ll need to take:

1. File the FAFSA: Before submitting a formal application for a PLUS loan, graduate students and dependent undergraduate students should first fill out and submit a Free Application for Federal Student Aid (FAFSA).
2. Lift any existing credit freezes: A credit check is required to determine whether you have adverse credit. If you have an active credit freeze in place, remove the freeze by contacting the credit bureaus to avoid application processing issues.
3. Log in to your StudentAid.gov account: Graduate students and parent borrowers must log in to StudentAid.gov using their own FSA ID credentials.
4. Fill out the Direct PLUS Loan application online: You’ll need to provide information about the student and school, as well as details about the desired loan (such as loan amount and loan period). You must certify that the information you provided is accurate and consent to a credit check. Parents will also need to provide their personal and employer information. Finally, review your responses and submit the application digitally.
5. Sign the Master Promissory Note (MPN): If you’re eligible for a Direct PLUS Loan, you must sign the MPN, which outlines the terms of the repayment agreement for the loan. You’ll also need to complete entrance counseling if this is your first PLUS loan.

It’s important to note that some schools have a different application process. Consider speaking to your school’s financial aid administrator to confirm how to apply for student loans.

If you’re deciding between a PLUS loan or another aid option, like a private student loan, there are a few considerations to weigh, according to Brian Safdari, CEO and founder of College Planning Experts, a Los Angeles-based college admissions resource.

Ultimately, it comes down to whether you value a federally backed fixed-rate loan, having flexible repayment options, and access to loan forgiveness, advises Safdari. 

“Last year, I had a client of mine that passed away from a car accident and he borrowed $150K in federal loans. All the loans were forgiven due to his death and his widow[ed] wife and kids did not have to pay back the loans,” says Safdari, who points out that death discharge isn’t guaranteed for all private loans.

Parent PLUS vs. grad PLUS loans

Below is an overview of the similarities and differences between the two Direct PLUS Loan types.

Tom O’Hare, holistic college adviser at Get College Going, highlights parent borrowers’ biggest misconception about parent PLUS loans. 

“Parent borrowers think that the Direct PLUS Loan carries the same benefits that a Direct student loan does,” says O’Hare. “A Direct PLUS Loan carries no in-school postponement of payment, waiver of interest accrual, and [has] limited repayment options.” 

Repayment options for PLUS Loans

PLUS loans are eligible for multiple standard repayment plans. Grad PLUS loan borrowers can also enroll in any of the income-driven repayment (IDR) plan options, which are based on your discretionary income and family size. However, parent PLUS loan borrowers can only select one income-driven repayment plan — Income-Contingent Repayment — and they must consolidate their loans first.

Here’s an overview of the available repayment plans for both loan types:

• Standard Repayment Plan: A fixed plan with equal monthly installment payments over a 10-year period.
• Graduated Repayment Plan: A fixed plan that starts with lower payments that gradually increase over a 10-year term.
• Extended Repayment Plan: A plan that has a fixed or graduated monthly payment over a longer 25-year repayment term. You must have more than $30,000 in outstanding Direct Loans to qualify for this plan.
• Income-Contingent Repayment (ICR): Payments are 20% of your discretionary income and are spread over 25 years.

Grad PLUS loan borrowers can also enroll in:

• Income-Based Repayment (IBR): Payments are set at 10% or 15% of your discretionary income over 20 or 25 years, depending on when you borrowed.
• Pay As You Earn (PAYE): Borrowers have 20 years to repay their debt with payments set at 10% of their discretionary income.
• Saving on a Valuable Education (SAVE): Payments are set to 10% of your discretionary income for 20 years if you only have undergraduate loans. For graduate loans, the repayment term is 25 years.

Changes to federal repayment plans coming in 2026

Starting in July 2026, new provisions under the “One, Big, Beautiful Bill Act” will change the landscape of Direct PLUS Loans and IDR plans. Lower annual and aggregate borrowing limits will go into effect, and grad PLUS loans will be sunsetted. 

Additionally, fewer repayment plans will be available depending on when PLUS loans are taken out. New grad PLUS borrowers on or after July 1, 2026, can only choose between a revised Standard Plan, which offers a tiered payment structure based on your outstanding loan balance, or the new income-based Repayment Assistance Plan (RAP). New parent PLUS loan borrowers will only be eligible for the Standard Repayment Plan — they’re not eligible for RAP.

“Confusion will reign as current parent borrowers, now referred to as legacy borrowers, will be grandfathered and have access to current borrowing provisions,” says O’Hare. “In contrast, new borrowers will be subject to the new rules.”