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PLUS Loans

Direct PLUS loans are meant to help your parents cover the costs of your undergraduate school expenses. Your parents do not have to prove financial need, but the loans are unsubsidized, which means interest accumulates while you are in school.

Your parents can take out PLUS loans to pay for your education expenses. You must be their financial dependent and enrolled at least half time. Also, your parents must pass a credit check. PLUS loans come directly from the U.S. Department of Education under the Direct Loan Program.

How much can my parents borrow?

The maximum limit on a PLUS Loan is equal to your cost of attending school, minus any other financial aid you receive. For example, if your cost of attendance is $10,000 and you receive $8,000 in other financial aid, your parents could borrow up to $2,000.

How do my parents apply?

For a Direct PLUS Loan, your parents must complete the FAFSA form. The school's financial aid office will provide instructions about their process for requesting a Direct PLUS Loan. Many schools require that you request a Direct PLUS Loan at

The request form has a list of schools that participate in the Direct PLUS Loan Program; if you select your (or your child's) school from the list, the site will notify you if your school does not use the process. If that is the case, check with the school to find out how to request a PLUS loan.

Are there any borrowing requirements my parents have to meet?

Yes, generally they have to pass a credit check. This is a review of their credit history to determine if they are likely to be able to pay back the loan.

If they don't pass, they might still be able to receive a loan with the help of a relative or friend who can pass the credit check. This person must agree to endorse the loan and promise to repay it if your parents don't. If your parents don't qualify for a loan because they didn't pass the credit check, they may qualify if they can demonstrate that extenuating (difficult and unusual) circumstances exist.

For your parents to borrow money for you, you must meet the general eligibility requirements for federal student aid. Your parents must also meet some of these general requirements. For example, they must meet citizenship requirements or be eligible non-citizens. They may not be in default or owe a refund to any FSA program.

Do they need to find a lender?

No. Their lender will be the U.S. Department of Education.

Can the school refuse the loan application?

Your school can refuse to certify your parents' loan application, or they can approve a loan for a smaller amount than your parents are eligible for. The school must document the reason for its decision and explain the reason to your parents in writing. The school's decision is final and cannot be appealed with the U.S. Department of Education.

Do my parents get the money or do I?

The U.S. Department of Education will send the loan funds to your school.

The school will use the loan money first to pay your tuition, fees, food and housing, and any other school charges. If any loan funds remain, your school will give them to you for other education expenses.

What's the interest rate on PLUS Loans?

The interest rate is 8.05 percent for Direct PLUS Loans first disbursed between July 1, 2023 and before July 1, 2024. These are fixed interest rates for the life of the loan.

Other than interest, is there a charge to get a PLUS Loan?

For Direct PLUS Loans first disbursed on or after October 1, 2020, the loan fee is 4.228%. Direct PLUS Loans first disbursed before that date had different loan fees.

How do my parents pay back the loan?

When your parents first receive the loan, there will be a loan servicer listed on the disclosure statement. They will make their payments through this loan servicer.

Are there any tax credits available for paying back these loans?

Yes, there are tax incentives for certain higher education expenses. For certain borrowers, student loan interest can be deducted. This benefit applies to federal and non-federal loans taken out to pay for post-secondary education costs. The maximum deduction is $2,500 a year.

You can find out more about these credits and other tax benefits through the Internal Revenue Service (IRS) :

IRS Publication 970 -- Tax Benefits for Education

Q: When do my parents pay back the loan?

Your parents will generally be expected to start making payments on your Direct PLUS Loan once your loan is fully disbursed (paid out). However, they may make a request for a deferment while you are enrolled at least half-time and for an additional six months after you graduate, leave school, or drop below half-time enrollment. They don't have to make any payments while the loan is deferred.


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OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.