What Is a Parent PLUS Loan?

What Is a Parent PLUS Loan?

A parent PLUS loan is a federal loan offered through the U.S. Department of Education that allows a biological or adoptive parent to borrow money to help pay for their dependent child's undergraduate education. The loan is in the parent's name, which means the parent is fully responsible for repayment even though the funds support the student.

After your child fills out the Free Application for Federal Student Aid (FAFSA), you'll complete a separate parent PLUS loan application. If approved, the Department of Education sends the loan funds directly to your child's school to cover tuition, fees, room and board and other eligible costs. Any remaining funds are then released to your child to use for other approved education expenses.

Parent PLUS loans carry fixed interest rates and origination fees set by the federal government, and the rates are the same for everyone who qualifies. Repayment typically starts shortly after the loan is fully disbursed, though parents can request a deferment while the student is in school.

How Much Can You Borrow in Parent PLUS Loans?

For loans first disbursed before July 1, 2026, parents can borrow up to the school's total cost of attendance minus any other financial aid the student receives. There's no annual or lifetime cap under the current rules.

But all of that is changing. The One Big Beautiful Bill Act introduced new borrowing limits beginning with the 2026-2027 school year. Starting July 1, 2026, new parent PLUS borrowers will be limited to $20,000 each year per dependent student and $65,000 in total per dependent student.

These limits apply to all parents borrowing on behalf of the same student. So if both parents take out loans for the same child, their combined borrowing can't exceed the cap.

Note: If you've already gotten a parent PLUS loan before July 1, 2026, while your child was enrolled in their current program, you may keep borrowing under the old cost-of-attendance rules for up to three more academic years or until your student finishes the program, whichever comes first.

Parent PLUS Loan Requirements

To get approved for a parent PLUS loan, both you and your child have to meet specific requirements.

Requirements For Parents

• Relationship to the student: You must be the biological or adoptive parent of the student. Stepparents may qualify in certain situations, but grandparents and legal guardians don't, even if they're raising the child.
• U.S. citizenship or eligible noncitizen status: You must be a U.S. citizen, U.S. national or eligible noncitizen.
• No adverse credit history: You'll undergo a credit check. The Department of Education isn't looking for a minimum credit score but does flag specific negative items, such as bankruptcy, recent delinquencies, defaults, repossessions or foreclosures.
• No default on federal student aid: You can't be in default on any existing federal student loan or owe money on a federal grant overpayment.

Requirements For Students

• Enrollment status: The student must be your dependent undergraduate and enrolled at least half time at an eligible school.
• Completed FAFSA: The student must submit the FAFSA for the relevant award year.
• General federal aid eligibility: The student must meet the basic eligibility requirements for federal student aid, such as satisfactory academic progress and half-time enrollment.

Pros and Cons of Parent PLUS Loans

Before you apply for parent PLUS loans, it's important to understand both the advantages and disadvantages, particularly in how they apply to your situation. Here's what to keep in mind.

How to Apply for Parent PLUS Loans

If you've decided that a parent PLUS loan is the right move, here's how to apply:

1. Confirm your eligibility. Review the parent and student requirements to make sure you both qualify.
2. Have your child file the FAFSA. You'll need to provide your financial information as part of your child's FAFSA.
3. Submit the parent PLUS application. Apply at StudentAid.gov using your FSA ID. You'll provide personal details, employer information, the school's name and your requested loan amount. The application typically takes about 20 minutes.
4. Complete the master promissory note. If approved, you'll need to sign this before funds can be disbursed. Read the terms carefully so you understand your obligations.
5. Complete any school-specific steps. Some schools may have their own additional process, so check with your child's financial aid office.

Tip: Apply as early as possible after the FAFSA opens. Schools process aid in the order they receive complete applications, and a delay on your end can delay your child's financial aid package.

When Does Parent PLUS Loan Repayment Start?

By default, parent PLUS loan repayment begins as soon as the loan is fully disbursed. Once the funds reach the school, your loan servicer will contact you to set up monthly payments.

You can ask your servicer to defer payments while your child is enrolled at least half time. If approved, repayment doesn't start until six months after your child graduates, leaves school or drops below half-time enrollment.

Just remember that interest still accrues during deferment. If you don't make at least interest-only payments while your child is in school, that unpaid interest can be capitalized—added to your loan balance—once repayment begins. That increases the total amount you'll pay back.

Is It Better to Get a Parent PLUS Loan or a Private Loan?

The right choice depends on your credit, your goals and how much flexibility you want during repayment. Here are the key differences:

• Credit requirements: Parent PLUS loans don't require a minimum credit score, just no adverse credit history. Private lenders use traditional underwriting and may deny applicants with lower scores or insufficient income.
• Interest rates: Parent PLUS loans offer a single fixed rate for everyone who qualifies. Private lenders may offer fixed or variable rates, often based on the borrower's credit.
• Fees: Parent PLUS loans charge an origination fee deducted from each disbursement. Most private lenders don't charge one.
• Repayment terms: Federal parent PLUS loans typically use a 10-year standard repayment term. New federal loans first disbursed on or after July 1, 2026, are limited to the tiered repayment plan, which has terms ranging from 10 to 25 years. Private student loan terms range from five to 25 years.
• Borrower protections: Federal loans offer generous deferment, forbearance and death and disability discharge. Private loans usually have fewer protections.

In general, federal parent PLUS loans are safer if you need flexibility, but a private loan may be cheaper if you have strong credit and don't anticipate needing federal relief programs.

Learn more: Should You Apply for a Parent PLUS Loan or Private Loan?

Frequently Asked Questions

The Bottom Line

Parent PLUS loans can help you bridge the gap between what financial aid covers and what college actually costs, but they come with real tradeoffs. The interest rate and fees are higher than what undergraduates pay on direct loans, and the new borrowing caps mean parents may need to combine federal loans with savings, scholarships or private financing to cover bigger price tags.

Because parent PLUS loans require a credit check, it's a good idea to know where you stand before you apply. You can check your free credit report and FICO^® Score^Θ through Experian to see what lenders will see and address any issues that could lead to denial.