Do you have a dependent son or daughter in college who is unable to qualify for need-based financial aid? Or does the amount of financial aid awarded fall short of the total costs?

If so, you may apply for a Direct PLUS Loan to assist your dependent undergraduate student in paying for his/her education. To be eligible, you must not have a negative credit history. The loan will be in your name, and you are responsible for paying it back.

Parents may borrow up to the cost of their student's attendance each year, minus any financial assistance the student is already receiving. PLUS loans have a fixed interest rate of 7.9%. Interest begins accruing on the loan immediately after the first disbursement and continues to accrue until the principal balance is paid in full.

The first payment is generally due within 60 days after the loan is fully disbursed, and there are various repayment plans available. However, parents may request to postpone their payments while their dependent student is enrolled at least half time.

PLUS loans must be repaid even if:

  • Your dependent student is not satisfied with the quality of education he or she receives.
  • Your student does not complete the program of study.
  • Your student is not able to obtain employment.

Your ability or inability to repay your Federal PLUS loan can affect your credit worthiness. Failure to repay your loan can increase your total debt because collection costs may be added to your loan balance. Make sure that you understand the consequences of default when borrowing a loan for your student.

Having repayment issues?

Parent borrowers having trouble making payments should seek assistance through their loan holder or servicer.

Note: If a parent is denied a Federal PLUS Loan due to negative credit history, the dependent student may be eligible for an additional unsubsidized Federal Stafford Loan.