Federal Parent PLUS Loans

Written by Michael Bennet

Federal Parent PLUS Loans are essentially federal parent loans that your mother and father can take out in order to fund your higher education.

The PLUS Loan is much different than both the Stafford Loan, and the Perkins Loan in that it is based partly on credit, and because it does require a separate application to be filled out by your parents.

You are eligible to receive a PLUS Loan if you are a dependent undergraduate student who is enrolled in an eligible degree program at a participating institution.


If you think that your parents would be interested in taking one of these loans out to fund part of your college education they must first get a hold of a Direct PLUS Loan application and promissory note from your school’s financial aid office.

Once they have this application it is then just a matter of filling it out properly and submitting it by the appropriate deadlines.


You will be notified by your school about your approval status at around the same time you should receive your standard award letter from your school. One of the great things about PLUS Loans is that you can borrow up to the cost of attendance of going to your particular institution as long as your parents are willing to take out that amount of money.

Once you are approved for a PLUS Loan, the proceeds will be sent to your school, and credited towards your student account much in the same way any other federal student loan would be.

Interest Rates

For all PLUS Loans that are disbursed after July 1, 2006, the interest rate is fixed at 7.9 percent. Your parents will also have to pay a fee of four percent each time a disbursement is made. You will have the option of beginning payment either 60 days after your initial disbursement, or six months after you cease to be enrolled on at least a half-time basis.

Overall PLUS Loans can be a feather in your financial aid cap if your parents are willing to go into debt for your college education, and because they can be used in conjunction with your Pell Grant aid, they should always be taken into consideration if you need additional money for school, especially after you have exhausted some of the more popular financial aid instruments that are in existence.