Parent PLUS Loans: Rates, Limits, and Repayment Options
Parent PLUS loans let parents borrow up to the full cost of attendance minus any other financial aid. For 2025–26 the rate is a fixed 9.083% with a 4.228% origination fee, and repayment spans 10 to 25 years — including Income-Contingent Repayment if you consolidate. A credit check is required, and approval does not depend on the student's credit.
What a Parent PLUS Loan Is
A Parent PLUS loan is a federal student loan taken out by a parent on behalf of a dependent undergraduate child. It's borrowed in the parent's name, so the parent is legally responsible for repayment even though the student benefits. Unlike subsidized and unsubsidized Direct loans, a PLUS loan requires a credit check — but approval is based on the parent's credit history, not the student's. For the 2025–26 school year the interest rate is a fixed 9.083%, set annually by Congress and the same for every borrower regardless of creditworthiness.
Borrowing Limits and Fees
There's no separate dollar cap on a Parent PLUS loan: you can borrow up to the student's full cost of attendance minus all other financial aid they receive, including grants, scholarships, work-study, and other loans. A 4.228% origination fee is deducted from each disbursement, so to receive a given net amount you need to borrow slightly more. You can take out a PLUS loan each year for each dependent child, and you're free to borrow less than the maximum — you're never required to take the full amount.
How to Apply for a Parent PLUS Loan
Start with the student's FAFSA, then submit a Parent PLUS application at studentaid.gov. The Department of Education runs a credit check for adverse credit history — a defaulted loan, bankruptcy discharge, foreclosure, or a debt that's 90+ days delinquent can disqualify you, though a debt that's been repaid or had an approved repayment arrangement may not. If you're approved, you sign a Master Promissory Note and funds go to the school. If you're denied, the student automatically becomes eligible for additional unsubsidized Direct Loan funds up to the same cost-of-attendance limit.
Repayment Options for Parent PLUS Loans
Standard Repayment spreads the loan over 10 years with fixed payments, minimizing total interest. Graduated Repayment starts payments low and raises them every two years over 10 years. Extended Repayment stretches the term to 25 years for balances over $30,000, lowering monthly payments at the cost of more total interest. If you consolidate the PLUS loan into a Direct Consolidation Loan, you gain access to Income-Contingent Repayment (ICR), which caps your payment at 20% of discretionary income or a 12-year fixed payment, whichever is less, and forgives any remaining balance after 25 years.
Parent PLUS vs. Private Student Loans
A PLUS loan carries a fixed rate, doesn't depend on income or the parent's credit score, and comes with federal protections: deferment, forbearance, death and disability discharge, and Public Service Loan Forgiveness if the parent works full-time for a qualifying employer. Private parent loans can offer lower rates for parents with excellent credit, but rates can be variable, they lack federal forgiveness and income-driven options, and they aren't forgiven on death or disability. For most families the PLUS loan is the safer first choice, with private loans only for the shortfall the PLUS can't cover.
Frequently Asked Questions
What is the Parent PLUS loan interest rate?
For loans disbursed July 1, 2025 through June 30, 2026, the rate is a fixed 9.083%. The rate is set each year by Congress and is the same for every borrower regardless of credit. A 4.228% origination fee is deducted from each disbursement, reducing the amount that reaches the school.
How much can I borrow with a Parent PLUS loan?
Up to the student's cost of attendance minus all other financial aid — grants, scholarships, work-study, and other loans. There's no separate annual dollar cap; parents can borrow this amount each year for each dependent child, and they can choose to borrow less than the maximum.
Can a Parent PLUS loan be forgiven?
Yes, two paths. Public Service Loan Forgiveness (PSLF) forgives the balance after 120 qualifying payments if you work full-time for a qualifying government or nonprofit employer and repay under an income-driven plan — which for PLUS loans means consolidating into a Direct Consolidation Loan and choosing ICR. Income-Contingent Repayment also forgives any remaining balance after 25 years of payments.
Can a Parent PLUS loan be transferred to the student?
No. The loan is in your name and the legal obligation to repay stays with you, even though the student benefits. The student cannot assume it. If you want the student to handle payments, you can arrange that privately, but you remain responsible to the government if they stop paying.