Parent PLUS Loan: A Guide to Financing Your Child’s Education

When it comes to funding your child’s education, the cost can be overwhelming. However, there are various financial aid options available to help ease the burden. One such option is the Parent PLUS Loan.

In this comprehensive guide, we will delve into the details of Parent PLUS Loans, discussing their benefits, eligibility criteria, application process, and repayment options. By the end, you will have a clear understanding of how Parent PLUS Loans can support your child’s educational journey.

Parent PLUS Loan

What is a Parent PLUS Loan?

A Parent PLUS Loan is a federal loan program that allows parents of dependent undergraduate students to borrow funds to cover educational expenses. It is an attractive option for parents who want to support their children’s higher education but may not have sufficient savings or access to other financial resources. Parent PLUS Loans are issued by the U.S. Department of Education and provide a reliable source of financing.

Benefits of Parent PLUS Loans

  • Accessible Financing: Parent PLUS Loans offer a convenient way for parents to access funds to support their child’s education, covering expenses such as tuition, room and board, books, and other educational costs.
  • No Cosigner Required: Unlike private loans, Parent PLUS Loans do not require a cosigner. The parent borrower assumes full responsibility for repaying the loan, eliminating the need to involve another party.
  • Fixed Interest Rates: Parent PLUS Loans have fixed interest rates, ensuring stability and predictability in repayment. This allows parents to plan their finances accordingly without worrying about fluctuating rates.
  • Flexible Repayment Options: The repayment options for Parent PLUS Loans are flexible, providing parents with choices that suit their financial situation. Options include standard repayment, extended repayment, graduated repayment, and income-driven repayment plans.

Eligibility Criteria for Parent PLUS Loans

To be eligible for a Parent PLUS Loan, you must meet the following criteria:

  • Be the biological or adoptive parent of a dependent undergraduate student enrolled at least half-time in an eligible program at a participating institution.
  • Meet the general federal eligibility requirements, including U.S. citizenship or eligible noncitizen status, a valid Social Security number, and compliance with selective service registration.

How to Apply for a Parent PLUS Loan

The application process for a Parent PLUS Loan involves the following steps:

  1. Submit the FAFSA: Before applying for a Parent PLUS Loan, both the parent and the student must complete the Free Application for Federal Student Aid (FAFSA). This form determines the student’s eligibility for federal financial aid.
  2. Complete the PLUS Loan Application: After the FAFSA submission, the parent must complete the online PLUS Loan Application on the Federal Student Aid website. The application includes a credit check to assess the borrower’s creditworthiness.
  3. Sign the Master Promissory Note (MPN): Once the credit check is approved, the parent borrower must sign the MPN, which serves as a legally binding agreement to repay the loan.

Understanding Interest Rates and Fees

Parent PLUS Loans have fixed interest rates that are determined annually. The interest rates are generally higher than those offered for Direct Subsidized and Unsubsidized Loans. Additionally, there is an origination fee associated with each loan disbursement. It is important to consider these costs when evaluating the overall affordability of the loan.

Parent PLUS Loan Repayment Options

Repayment for Parent PLUS Loans typically begins within 60 days of the final disbursement of the loan. Here are the available repayment options:

  • Standard Repayment: This is the default option, with fixed monthly payments over a 10-year term.
  • Extended Repayment: This option extends the repayment term up to 25 years, resulting in lower monthly payments.
  • Graduated Repayment: Payments start low and gradually increase every two years over a 10-year term. This option is suitable for borrowers expecting their income to rise over time.
  • Income-Driven Repayment (IDR): IDR plans base monthly payments on the borrower’s income and family size, ensuring affordability based on their financial circumstances.

Pros and Cons of Parent PLUS Loans


  • Availability of funds to cover educational expenses
  • No requirement for a cosigner
  • Fixed interest rates for stability
  • Flexible repayment options based on financial capacity


  • Higher interest rates compared to other federal student loans
  • Origination fees increase the overall cost of the loan
  • Limited deferment and forbearance options
  • Parent borrowers are solely responsible for repayment

Alternatives to Parent PLUS Loans

While Parent PLUS Loans can be beneficial, it’s essential to explore alternative options to finance your child’s education. Here are a few alternatives worth considering:

  • Scholarships and Grants: Encourage your child to actively search for scholarships and grants, which do not require repayment and can significantly reduce the need for loans.
  • Federal Student Loans: Direct Subsidized and Unsubsidized Loans are available to students, offering lower interest rates and more favorable repayment terms.
  • Private Student Loans: If federal aid and scholarships are insufficient, private student loans can be considered. However, it’s important to compare interest rates, terms, and repayment options before choosing this option.

Tips for Managing Parent PLUS Loan Debt

To effectively manage your Parent PLUS Loan debt, consider the following tips:

  • Create a Budget: Develop a comprehensive budget to monitor your monthly expenses and ensure you allocate sufficient funds for loan repayment.
  • Explore Repayment Options: Understand the various repayment plans available and select the one that aligns with your financial goals and capacity.
  • Communicate with Your Child: Discuss your financial situation with your child and involve them in the decision-making process. This helps them understand the responsibility associated with the loan and may encourage them to contribute where possible.
  • Consider Loan Forgiveness Programs: Investigate loan forgiveness programs available for certain professions or public service work. These programs can potentially reduce or eliminate your loan balance.
  • Seek Professional Guidance: If you’re struggling with your Parent PLUS Loan, consult a financial advisor or a student loan counselor who can provide personalized advice based on your circumstances.


Parent PLUS Loans offer a valuable financing option for parents looking to support their child’s educational journey. With accessible funds, fixed interest rates, and flexible repayment options, these loans provide a reliable means of covering educational expenses.

However, it’s crucial to consider the associated costs, explore alternative funding sources, and effectively manage the loan to ensure long-term financial stability. By understanding the intricacies of Parent PLUS Loans and making informed decisions, you can navigate the financing process with confidence and provide your child with the educational opportunities they deserve.


Can I transfer a Parent PLUS Loan to my child?

No, Parent PLUS Loans cannot be transferred to the child. The parent borrower is solely responsible for loan repayment.

Are there any loan forgiveness programs for Parent PLUS Loans?

Unfortunately, Parent PLUS Loans are not eligible for most loan forgiveness programs. However, some income-driven repayment plans may offer forgiveness after a certain number of qualifying payments.

What happens if I can’t make my Parent PLUS Loan payments?

If you’re facing financial hardship, consider options like deferment, forbearance, or income-driven repayment plans to temporarily reduce or pause your loan payments.

Can I consolidate my Parent PLUS Loans?

Yes, you can consolidate your Parent PLUS Loans through the Direct Consolidation Loan program. Consolidation simplifies repayment by combining multiple loans into a single loan with a fixed interest rate.

Is the interest on Parent PLUS Loans tax-deductible?

In some cases, the interest paid on Parent PLUS Loans may be tax-deductible. Consult a tax professional or refer to IRS guidelines for specific details.

Can my credit score impact my eligibility for a Parent PLUS Loan?

A: Yes, Parent PLUS Loan eligibility depends on a credit check. Adverse credit histories, such as bankruptcy or significant delinquencies, may affect approval. However, you can explore options like obtaining an endorser or appealing the credit decision.

Can I transfer my Parent PLUS Loan to my child if they assume responsibility?

A: No, the responsibility for repayment remains with the parent borrower. However, refinancing with a private lender may allow your child to assume the loan in their name.

Can I use a Parent PLUS Loan to pay for graduate school expenses?

Yes, Parent PLUS Loans can be used to cover educational expenses for dependent graduate students as well.

Can I change my repayment plan after the loan is disbursed?

Yes, you can change your repayment plan at any time by contacting your loan servicer. Keep in mind that certain eligibility requirements may apply.

What happens if I default on my Parent PLUS Loan?

Defaulting on a Parent PLUS Loan can have severe consequences, including damage to your credit score, wage garnishment, and legal action. It’s crucial to communicate with your loan servicer if you’re facing financial difficulties to explore alternative repayment options.

Hello Friends, My Name is Charanjeet Singh and I am a professional blogger since 2018. I have completed my PGDCA Diploma. and I love to write about Finance, Gaming, and General Knowledge.

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