Direct PLUS Loans for parents
- Allows parents to borrow money to pay for a dependent student's college education
- Loan is in parent’s name and parent, not student, is responsible for the loan
- No collateral is needed
- Requires a credit check, usually only looking for adverse credit
- Loans first disbursed on or after July 1, 2006 have a fixed interest rate of 7.9 percent for Direct PLUS Loans and 8.5 percent for Federal PLUS Loans.(Please note that effective July 1, 2010, Federal PLUS loans are no longer available as a result of recent legislation. This interest rate applies to loans issued prior to July 1, 2010.)
- Loans first disbursed between July 1, 1998 and June 30, 2006 have a variable interest rate with a cap of 9 percent. The interest rate is adjusted each year on July 1 (your loan holder will notify you of interest rates changes annually). Contact your loan holder to determine the interest rate.
- If you have a loan first disbursed prior to July 1, 1998, contact your loan holder to determine the interest rate.
The annual maximum that may be borrowed under this program is the difference between the cost of education minus any financial aid received. There is no aggregate maximum.
You have a variety of repayment options for PLUS Loans. Learn more.
Deferment and forbearance (solutions for loan repayment problems)
Cancellation, forgiveness, and discharge
Important note about Federal PLUS Loans and the Federal Family Education Loan Program: Beginning July 1, 2010, the loan types are Direct PLUS Loans available through the William D. Ford Federal Direct Loan Program. The U.S. Government makes these loans directly through schools.
If you borrowed prior to July 1, 2010, you may have a Federal PLUS Loan from the Federal Family Education Loan (FFEL) Program. (Under the FFEL Program, private lenders such as banks, credit unions, and savings and loan associations made the loans.) Although the FFEL Program and Federal PLUS Loans no longer are available, existing loans remain active.