Parent Plus Loan – What You Need to Know

Facing the ever-rising costs of college, many families find themselves needing additional financial support after exhausting all other options like grants, scholarships, and federal student loans. This is where Parent PLUS Loans come in. They are federal loans specifically designed to help parents of dependent undergraduate students cover the remaining cost of attendance after other financial aid has been applied.

Parent Plus Loan

It’s important to understand that Parent PLUS Loans are the responsibility of the parent, not the student. This means the parent borrower is responsible for repayment, including principal and interest, even if the student is unable to do so. Therefore, carefully considering the financial implications and exploring all other options is crucial before taking on this type of loan.

What is a Parent PLUS Loan?

A Parent PLUS Loan is a federal loan specifically designed to help parents borrow money to pay for their dependent undergraduate student’s educational expenses. Unlike student loans, parents, not the student, are responsible for repaying the loan. There are no income limitations to qualify for a Parent PLUS Loan, but a credit check is required.

Eligibility for Parent PLUS Loan

Not everyone is eligible for a Parent PLUS Loan. Here’s a breakdown of the key requirements:

Parent Eligibility

  • Relationship: You must be the biological or adoptive parent of the dependent undergraduate student. In specific cases, some stepparents may also qualify. Grandparents and legal guardians are not eligible.
  • Citizenship: You must be a U.S. citizen or an eligible non-citizen.
  • Credit History: You generally need to meet minimal credit standards to qualify. The Department of Education considers factors like delinquencies, collections, and defaults to determine if your credit history is considered “adverse.” If you have an adverse credit history, you may still be eligible with a qualified endorser who does not have an adverse credit history.
  • Federal Aid Eligibility: You and your child must meet the general eligibility requirements for federal student aid. This includes being a U.S. citizen or eligible non-citizen with a valid Social Security number.

Student Eligibility

  • Enrollment: Your child must be a dependent undergraduate student enrolled at least half-time at an eligible Title IV college or career school.
  • Federal Aid Eligibility: Your child must also meet the general eligibility requirements for federal student aid.

It’s important to note that meeting these requirements doesn’t guarantee loan approval. The Department of Education will assess your financial situation and determine the loan amount you are eligible for.

How to Apply for a Parent PLUS Loan

  • Complete the Free Application for Federal Student Aid (FAFSA): This will determine your student’s eligibility for federal grants and scholarships and calculate their expected family contribution (EFC).
  • Apply for a Parent PLUS Loan: You can apply online at the Federal Student Aid website.
  • Complete credit check: The Department of Education will conduct a credit check to determine your eligibility and interest rate.
  • Master Promissory Note: Once approved, you’ll need to sign a Master Promissory Note, which outlines the terms and conditions of the loan.

Interest Rates and Repayment

  • Interest rates are variable and are adjusted annually based on the market.
  • Repayment begins six months after your student graduates, leaves school less than half-time, or withdraws.
  • The standard repayment term is 10 years.
  • Income-driven repayment plans may be available depending on your income.

Forgiveness Programs

Under specific circumstances, Parent PLUS Loans may be eligible for forgiveness. These programs include:

  • Public Service Loan Forgiveness (PSLF): If you work full-time in a public service job for ten years and make timely loan payments under an income-driven repayment plan, the remaining balance of your Parent PLUS Loan may be forgiven.
  • Teacher Cancellation at Low-Income Schools: If you teach full-time for five consecutive years in a low-income elementary or secondary school and meet other requirements, a portion of your Parent PLUS Loan may be forgiven.

Additional Considerations

  • Borrow responsibly: Parent PLUS Loans are a significant financial commitment. Only borrow what you need and are confident you can repay.
  • Explore other financial aid options: Before taking out a Parent PLUS Loan, exhaust all other financial aid options available to your child, such as scholarships, grants, and federal student loans.
  • Shop around for private loans: If you are not eligible for a Parent PLUS Loan or need additional funds, compare interest rates and terms from private lenders before borrowing.

Benefits and Drawbacks of Parent PLUS Loans


  • Helps cover educational expenses not met by other financial aid sources.
  • No income limitations, unlike some grant programs.
  • Fixed interest rate makes budgeting easier.


  • Parents are solely responsible for repayment.
  • Higher interest rates compared to some other loan options.
  • Can negatively impact your credit score if not repaid on time.

Alternatives to Parent PLUS Loans

  • Private loans: May offer lower interest rates but often have stricter eligibility requirements.
  • Home equity loans or lines of credit: These can be risky as they use your home as collateral.
  • Scholarships and grants: Free money to help cover college costs, but competition can be fierce.


Parent PLUS Loans can be a valuable tool for parents helping their children finance college. However, it’s crucial to understand the terms and conditions carefully before borrowing. This guide provides a comprehensive overview of Parent PLUS Loans, but we recommend consulting with a financial advisor or loan counselor for personalized guidance.