A Parent PLUS Loan is a credit-based loan available to the biological parent, legal adoptive parent or the spouse of a biological or legal adoptive parent of an undergraduate dependent student. The parent must apply separately at studentaid.gov. If approved, the loan is in the parent’s name and cannot be transferred to the student. It is used to help assist with the dependent student’s higher education expenses.
Parent PLUS loans have a fixed interest rate, meaning the interest rate stays the same for the life of the loan. Currently, Parent PLUS loans disbursed on or after July 1, 2025 and before July 1, 2026 have an 8.94% fixed interest rate.
In addition, all Parent PLUS Loans disbursed after October 1, 2020 have a loan origination fee of 4.228% which is taken off each disbursement. Interest rates on federal loans are set by federal law each year, not the U.S. Department of Education.
The institution will receive the loan funds from the Department of Education and apply it to the student’s school account to pay for tuition, fees, room and board, and other school charges. If there are any PLUS Loan funds remaining, the institution will release them to the Parent PLUS Loan Borrower or, if authorized, to the student.
If the student for whom the Parent PLUS Loan was borrowed is enrolled at least half-time at an eligible school, the parent borrower can request a deferment to postpone payments. During this deferment, no monthly payments are required, but interest will continue to accrue on the loan.
If the borrower does not request and receive a deferment, payments must begin as soon as the loan is fully disbursed (paid out to the school).
This is the total amount of loans you are allowed to borrow for your dependent student over your lifetime. If you reach this limit but later repay some of your loans, reducing your outstanding balance below the maximum, you may borrow again—up to the remaining amount allowed under your aggregate loan limit.
Each dependent student has a separate aggregate loan limit, meaning parents can borrow up to $65,000 per dependent student.
The maximum loan amount you permitted to borrow each calendar year. This amount is typically set by the lender (in this case, the US Department of Education).
Beginning July 1, 2026, parent borrowers may apply for a Parent PLUS Loan of up to $20,000, or the student’s full cost of attendance (COA), whichever is less. Current borrowers can borrow up to the student’s full cost of attendance, even if it exceeds $20,000 per year.
The COA is set by your student’s institution and represents the total estimated cost for the academic year (typically August–May). It includes:
Students may receive up to their full COA through all combined financial aid (scholarships, grants, work study, and loans). If your student already has other types of aid, the amount you can borrow may be less than $20,000. The institution’s financial aid office determines the COA and awards other aid. Contact them for details on approximate annual loan amounts.
All institutions are required to set a Cost of Attendance budget (COA) which represents the total estimated cost for the academic year (typically August–May). It includes:
Students may receive up to their full COA through all combined financial aid (scholarships, grants, and loans). The institution’s financial aid office determines the COA and awards other aid. Contact them for further details.
All new Parent PLUS loans from July 1, 2026 on must be repaid under the standard repayment plan.
Origination refers to the process of creating the loan and includes the associated fee for doing so. For Parent PLUS Loans, an origination fee of 4.228% is charged on the total loan amount. This fee is deducted before the funds are disbursed to the school.
If you borrow $10,000, your student will receive $9,578 toward educational expenses. The difference of $422 represents the origination fee charged by the U.S. Department of Education for processing the loan.
If you already have a Parent PLUS Loan, please review your repayment options, and, if necessary, apply as soon as possible for Direct Loan Consolidation so that you can take advantage of the Income Contingent Repayment plan.
For borrowers who had borrowed Parent PLUS before July 1, 2026, and subsequently borrow from the program on or after July 1, 2026, repayment for all loans must be under the same repayment plan, of which the only eligible plan for Parent PLUS borrowers is the standard plan.
One could, though, consolidate the previous Parent PLUS Loan and apply for an Income Contingent Repayment Plan for the prior loan balance, then borrow an additional PLUS Loan under the new provisions after July 1, 2026.
If you reach the aggregate borrowing limit of $65,000 for Parent PLUS Loans, you will not be able to borrow additional PLUS Loan funds unless you pay down your existing balance. If this limit is reached before your student graduates, you will need to explore alternative ways to cover remaining education costs, such as private student loans.
No. You are already taking advantage of the most flexible and favorable repayment program, and have completed all suggested steps.
Generally speaking, borrowers are usually advised to keep Parent PLUS loans separate. Because Parent PLUS loans often have different rules than other federal student loans, a partial loan consolidation allows parents to preserve options on their Parent PLUS loans without impacting options for their other student loans.
No. A Parent PLUS loan is borrowed in the name of the parent, and the Department of Education does not offer a path to transfer the debt into the name of the child. Repayment of a Parent PLUS loan is the legal responsibility of the parent.
It depends. If you and your spouse file taxes jointly, both incomes will be used in determining your ability to pay. However, if you file taxes as married filing separately, only the borrower’s income will be used in payment calculations.
Talk with your tax advisor and consult your student loan servicer to identify the optimal strategy for your situation.
These terms all sound similar, but there are key differences for Parent PLUS borrowers.
Income-Driven Repayment (IDR) isn’t a specific repayment plan. Instead, it describes a category of repayment plans that allow borrowers to make monthly payments based on what they earn instead of the balance of their loan. ICR and IBR are both examples of Income-Driven Repayment plans.
The Income-Contingent Repayment (ICR) Plan usually charges borrowers 20% of their monthly discretionary income. ICR defines discretionary income as any income earned in excess of the federal poverty level based on household size and state of residence.
The Income-Based Repayment (IBR) Plan will charge Parent PLUS borrowers 15% of their monthly discretionary income. IBR defines discretionary income as income that exceeds 150% of the federal poverty level guidelines. This repayment option will result in lower payments for most borrowers, but it is not yet available for Parent PLUS borrowers. IBR will become available to Parent PLUS borrowers who consolidate before the upcoming deadline and wish to enroll in an IDR plan after ICR has been phased out in 2028.
Current borrowers under the ICR plan will automatically be transitioned to the IBR plan.
Yes. Parent PLUS borrowers who consolidate before the deadline and enroll in an income-driven repayment plan can potentially qualify for $0 per month payments, if their income on their most recent tax return falls below a certain threshold or if they lose their job.
The exact numbers will depend on the borrower’s income, state of residence, family size, and federal poverty level guidelines.
Your federal student loan servicer should be able to answer all student loan related questions for your account. If you do not know who services your loans, servicer information for your debt can be found on studentaid.gov.
