government aid: Parent PLUS Loan

about parent PLUS loans
Government guaranteed fixed rate loan that covers up to 100% of your dependent child's cost of education, less any financial aid awarded the child. Designed to pay for education-related expenses as certified by the institution.


Loan Amounts: up to 100% of education costs minus aid given
Payments Begin: 60 days after the first loan disbursement
Interest Rates: fixed for the life of the loan: see rates
No Restrictions: no prepayment penalties; no collateral



More Information:

  1. parent PLUS loan summary review
  2. PLUS loan advantages/disadvantages
  3. detailed loan information
  4. use this "tally sheet" to add up your aid

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Parent PLUS Loan Summary Review


  • Loan Amounts:
    up to the total cost of education minus any student financial aid given awarded
  • Interest Rates:
    fixed for the life of the PLUS loan
  • No Restrictions:
    does not require collateral; no prepayment penalities
  • Loan Processing:
    pre-approval within minutes; funding can be made within 30 days or less
  • Loan Eligibility:
    student must be enrolled at least half-time in an undergraduate degree or certificate program at an approved school. Borrower must have a satisfactory credit history.
  • Loan Repayment Terms:
    repayment begins 60 days after disbursement


money saving tip

Parents should setup a budget with the student that plans the aid needs and monthly spending amounts for the school year. Download our worksheet that outlines the budget needs for each academic year.

see our discussion on building a school budget

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PLUS Loan Advantages and Disadvantages


  • Pays the Entire Cost
    parents can borrow up to the total cost of education minus any financial aid received by the student

  • Low Interest
    federal PLUS loans are fixed rate loans that remain fixed for the entire term of the loan; current PLUS loan rates are about the same as most other financing options: view interest rates

  • Flexible Repayment Plans
    The federal government offers flexible repayment plans that can fit your budget. Loan payments begin 60 days after disbursements have been made to the school.



  • Loan Must be Repaid by the Borrower
    the loan is underwritten for the parent or graduate; the parent or graduate is responsible for repaying the loan

  • Requires Federal Filings
    you must file the FAFSA form with the federal government in order to apply for PLUS loans: see FAFSA file

  • Credit Check Required
    in order to qualify for the loan, you must pass a credit check as set by the federal government

  • Multiple Borrowings
    you have to file and apply for a loan each academic year.

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Detail Loan Information

PLUS loans are available to the parents of dependent undergraduate students enrolled at least half time in an eligible program at an eligible school

The student must meet certain criteria in order qualify for financial student loan assistance:

  • display a need for financial aid (except for unsubsidized Stafford and PLUS loans).
  • complete high school and have been awarded a high school diploma or a General Education Development (GED) Certificate.
  • pass a college entrance exam approved by the U.S. Department of Education, and/or meet other standards your state may establish.
  • be enrolled or accepted for enrollment as a regular student working at least half-time toward a degree or certificate in an eligible program.
  • be a U.S. citizen or eligible non-citizen.
  • have a valid Social Security number, link to obtain SSN:

  • make satisfactory academic progress.
  • sign a statement on the Free Application for Federal Student Aid (FAFSA) certifying that you will use federal student aid only for educational purposes
  • sign a statement on the FAFSA certifying that you are not in default on a federal student loan and that you do not owe money back on a federal student grant.
  • register with the Selective Service (for young men age 18 and over).
    you can register online:

The school's Financial Aid Office will determine the student's dependent or independent status.

General guidelines state that students who are "independent" from their parents or guardians for basic living expenses will be eligible for Independent student loan limits. Students who are "dependent" upon their parents or guardians for basic living expenses will be eligible for Dependent student loan limits:

view student dependency status

Parents may borrow up to the cost of attendance minus the amount of any financial aid received

(including received Stafford student loan amounts)

Borrowed funds will be paid directly to the school from the lender or by the Federal Government under FDSLP.

The school will first use the money to pay your child's tuition and fees. Any remaining PLUS loan money is credited to your child's account or paid to the parents directly. The school must notify the parent of all credited funds.

PLUS loans are fixed rate loans with an upper limit,

Meaning that the rate will remain fixed for term of the loan. Fixed rates are applicable for all loans disbursed after July 01, 2007.

view current PLUS Loan rates:
click here for rates

You may be required to pay up to 4% processing fees to the lender upon loan disbursement.

Portion of these fees go the Federal Government and another portion to a guaranty agency to help reduce the cost of issuing the loans.

Generally these fees are deducted proportionately from each PLUS loan disbursement.

You may cancel the loan within 14 days after you receive written notification that funds have been credited to your child's account. Contact the school's financial aid office for cancellation terms.

PLUS loan repayment begins 60 days after loan funds have been disbursed to the school

deferments may be available for parents (the adult students) who are attending school at least half-time.

The repayment period is 10 years under one of the following plans:

  • Standard Repayment Plan:
    you pay a fixed amount per month
  • Graduated Repayment Plan:
    you begin payments that are low (equal to the interest accrued) and then increase over time until full repayment
  • Income-Sensitive Repayment Plan:
    the monthly payments change based upon annual income
  • Extended Repayment Plan:
    allows new borrowers on or after 10/7/98 with a total FFELP debt of at least $30,000 (FDSLP loans offer other repayment terms) to repay their loan (either fixed or graduated) for up to 25 years.

The PLUS loan is available only to parents who can pass a credit check;

If the parents fail to pass the credit check, they may receive the loan if someone with a good credit history co-signs for the loan or if the parent can show extenuating circumstances.

Interest paid on PLUS loans qualify a tax reduction

Borrowers who file tax returns can deduct some of the interest paid on their student loans. Taxpayers who have taken out loans to pay for the cost of attending an accredited college for themselves, a spouse, or a dependent may be eligible for this deduction.

see IRS tax publication for more information:
tax benefits of higher education

For more PLUS loan information:

financial aid steps in the application process:
reviews the steps required when applying for federal financial aid.

link to the U.S. Department of Education
to download the latest version of the Student Guide

apply online

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Build a College Budget
Students and parents should work together to setup a budgeting plan for college:
  • budget spending amount
  • budget aid sources
  • budget for emergency needs

Download this 1-page budgeting guide for establishing your college budget

get budgeting trifold
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