PLUS Loans
Direct PLUS loans are meant to help your
parents cover the costs of your undergraduate school expenses. Your
parents do not have to prove financial need, but the loans are
unsubsidized, which means interest accumulates while you are in
school.
Your parents can take out PLUS loans to pay for your education
expenses. You must be their financial dependent and enrolled at
least half time. Also, your parents must pass a credit check. PLUS
loans come directly from the U.S. Department of Education under the
Direct Loan Program.
How much can my parents borrow?
The maximum limit on a PLUS Loan is equal to your cost of
attending school, minus any other financial aid you receive. For
example, if your cost of attendance is $10,000 and you receive
$8,000 in other financial aid, your parents could borrow up to
$2,000.
How do my parents apply?
For a Direct PLUS Loan, your parents must complete the FAFSA
form. The school's financial aid office will provide instructions
about their process for requesting a Direct PLUS Loan. Many schools
require that you request a Direct PLUS Loan at StudentAid.gov.
The request form has a list of schools that participate in the
Direct PLUS Loan Program; if you select your (or your child's)
school from the list, the site will notify you if your school does
not use the StudentAid.gov
process. If that is the case, check with the school to find out how
to request a PLUS loan.
Are there any borrowing requirements my parents have to
meet?
Yes, generally they have to pass a credit check. This is a
review of their credit history to determine if they are likely to
be able to pay back the loan.
If they don't pass, they might still be able to receive a loan
with the help of a relative or friend who can pass the credit
check. This person must agree to endorse the loan and promise to
repay it if your parents don't. If your parents don't qualify for a
loan because they didn't pass the credit check, they may qualify if
they can demonstrate that extenuating (difficult and unusual)
circumstances exist.
For your parents to borrow money for you, you must meet the
general eligibility requirements for federal student aid. Your
parents must also meet some of these general requirements. For
example, they must meet citizenship requirements or be eligible
non-citizens. They may not be in default or owe a refund to any FSA
program.
Do they need to find a lender?
No. Their lender will be the U.S. Department of Education.
Can the school refuse the loan application?
Your school can refuse to certify your parents' loan
application, or they can approve a loan for a smaller amount than
your parents are eligible for. The school must document the reason
for its decision and explain the reason to your parents in writing.
The school's decision is final and cannot be appealed with the U.S.
Department of Education.
Do my parents get the money or do I?
The U.S. Department of Education will send the loan funds to
your school.
The school will use the loan money first to pay your tuition,
fees, food and housing, and any other school charges. If any loan
funds remain, your school will give them to you for other education
expenses.
What's the interest rate on PLUS Loans?
The interest rate is 8.94 percent for Direct PLUS Loans first
disbursed between July 1, 2025 and before July 1, 2026
. These are fixed interest rates for the life of
the loan.
Other than interest, is there a charge to get a PLUS Loan?
For Direct PLUS Loans first disbursed on or after October 1,
2020, the loan fee is 4.228%. Direct PLUS Loans first disbursed
before that date had different loan fees.
How do my parents pay back the loan?
When your parents first receive the loan, there will be a loan
servicer listed on the disclosure statement. They will make their
payments through this loan servicer.
Are there any tax credits available for paying back these
loans?
Yes, there are tax incentives for certain higher education
expenses. For certain borrowers, student loan interest can be
deducted. This benefit applies to federal and non-federal loans
taken out to pay for post-secondary education costs. The maximum
deduction is $2,500 a year.
You can find out more about these credits and other tax benefits
through the Internal Revenue Service (IRS) :
IRS
Publication 970 -- Tax Benefits for Education
When do my parents pay back the loan?
Your parents will generally be expected to start making payments
on your Direct PLUS Loan once your loan is fully disbursed (paid
out). However, they may make a request for a deferment while you
are enrolled at least half-time and for an additional six months
after you graduate, leave school, or drop below half-time
enrollment. They don't have to make any payments while the loan is
deferred.
How can I get more information?
For more information on student financial assistance programs,
contact the Federal Student Aid Information Center:
Link: StudentAid.gov
Phone: 1-800-4-FED-AID
(1-800-433-3243)
TTY: 1-800-730-8913
Spanish speakers are available (se habla espanol)