Federal Parent Plus Loan Options

June 29, 20220

Federal Parent Plus Loan Options


While parent plus loans are a great way for parents to help their children afford college, the loans aren’t the right choice for everyone. Before deciding whether to take out a parent plus loan, it’s important to consider several things such as your debt-to-income ratio and whether you can afford the monthly payments.

Parent-plus loans are available to parents of dependent undergraduate students. For the most part, federal student loans are offered to students based on financial need, academic performance, and other eligibility factors. However, the government offers parent plus loans as a way for parents to borrow funds that they can then use to help their kids pay for college.

In order to qualify for a parent plus loan, parents must be US citizens or permanent residents. They must also be borrowing funds for the benefit of their dependent undergraduate student’s education. The amount you can borrow is determined by the cost of attendance minus any financial aid your child receives. You will not be eligible if you have an adverse credit history and/or have defaulted on a federal student loan in the past.

How Do Parent Plus Loans Work?

The Parent Plus Loan is a federal loan that allows parents to borrow up to the cost of attendance minus other financial aid. It’s available from private lenders and through the Federal Direct Loan program. Eligibility requirements include being a U.S. citizen or permanent resident, having excellent credit, and being enrolled in college at least half the time (at least six credits per semester).

Parents who are not eligible may want to consider the Grad PLUS Loan or the Perkins Student Loan instead; these two programs have slightly different eligibility requirements but provide similar benefits for student borrowers and their families: low-interest rates, flexible payment plans, deferment options after graduation (and sometimes even during school), and forbearance if you lose your funding unexpectedly due to medical issues or other circumstances beyond your control

It’s important to note that parent plus loans aren’t issued or dispersed directly to the student. Instead, the money goes straight to the school being attended. Rather than paying for books or other supplies upfront and hoping that the funds are returned through federal financial aid options, parents can use plus loans to make sure that schools have all of the funds needed before classes begin.

Parent Plus Loans offer many benefits. For example, they are issued by the U.S. Department of Education and they do not require a credit check or any other type of approval process beyond completing the FAFSA form (Free Application for Federal Student Aid). In addition to offering lower interest rates and manageable repayment terms, parent loans allow parents to help their children pay for college costs that may not be covered by scholarships, grants, or federal financial aid programs.

Parents can use Plus loans to help their kids pay for books and other supplies as well as tuition and housing expenses such as food bills or rent payments in on-campus apartments or dorms.

When Can Parents Use Plus Loans?

You may be wondering why you should use a federal parent plus loan instead of a federal direct subsidized or unsubsidized student loan. The answer is simple: Plus loans offer more flexibility for parents than subsidized or unsubsidized student loans do. Plus loans are available to both parents and students, whereas subsidized and unsubsidized student loans are limited to students only.

Plus loans can be used by parents who have good credit scores (600+), so if your child does not have a high enough credit score for direct lending, you may still be able to secure financing for them through the parent-borrower side of these programs.

Unlike many other types of private education loans, Parent PLUS Loans do not require an origination fee or application fee; they also don’t charge any prepayment penalties if you want to pay early. However, it should be noted that interest accrues while you are still in school—so even though there aren’t any upfront fees associated with taking out this type of loan, there will still be added costs over time!

Plus loans are an option for parents whose children qualify for federal direct subsidized or unsubsidized student loans but still need more money in order to cover all expenses associated with college tuition and housing.

Plus loans are an option for parents whose children qualify for federal direct subsidized or unsubsidized student loans but still need more money in order to cover all expenses associated with college tuition and housing.

Parents who choose this option can borrow up to the cost of attendance minus any other aid the student receives. Unlike most forms of federal financial aid, Plus loans have a fixed interest rate, which is set by the government and will remain consistent throughout your repayment period. Plus loans also have a fixed repayment term of 10 years and no prepayment penalty if you pay off your loan early (although there may be some fees involved if you do so). Finally, parents who are unable to make payments on their Plus loan because their income has changed suddenly may be eligible for deferment or forbearance options that let them postpone payments until they’re able to resume them at a later date; however, opting for these options could increase the amount owed overall due back overall over time—as well as increase interest charges accrued during periods where no payment was made at all!

What Are Limitations on Plus Loans?

  • Plus loans have limits on how much you can borrow:
  • Cost of attendance is the total cost of going to school for one year. It includes tuition, fees, room and board, books, supplies, and travel expenses. For example, if a student attends an in-state public college for one year and has $30,000 in costs that are paid directly by the college (costs not covered by other aid), their cost of attendance would be $30K. If a student drops out after half a semester but doesn’t receive any refund checks from their school, they would still be responsible to pay back their PLUS loan based on the full amount they were awarded (plus interest).
  • Parent PLUS loan limitations work like this: The amount you can borrow is up to your child’s cost minus any other financial aid received during enrollment (excluding grants). This includes other federal loans or scholarships—only federal subsidized loans count toward this limitation! If your child receives 100% need-based aid with no parental contribution at all ($0), then there will be no Parent PLUS Loan limits for them because there isn’t any income or asset information available for consideration when determining eligibility. However, if your child receives even one penny over what they need under FAFSA guidelines ($20K), then there will be a PLUS Loan limit established based on those figures instead (and not based upon need).


Plus loans are a helpful financial aid tool available to parents of dependent undergraduate students. Before you pursue these loans, you should review all of the other options that are available to you so that you can choose the loan type and amount that will best suit your needs.