Parent PLUS Loans: What Students Need to Know

7 February 2026

Paying for college isn’t exactly a walk in the park—it’s more like a marathon with a backpack full of bricks. For many families, covering the full cost of tuition, room, and board can be a financial nightmare. That’s where Parent PLUS Loans come in. They can help bridge the gap when scholarships, grants, and student loans just aren’t enough.

But before you jump into the deep end, there are some key things you (and your parents) need to know about these loans. So, let’s break it all down—without the jargon and finance-speak that makes your eyes glaze over.

What Is a Parent PLUS Loan?

A Parent PLUS Loan is a federal student loan available to parents of dependent undergraduate students. Unlike other federal student loans, which are borrowed by the student, these loans are taken out by parents to help cover college costs.

Here’s the kicker: The parent—not the student—is legally responsible for repaying this loan. Yep, that means even if you graduate, get an amazing job, and start raking in the cash, your parents are still on the hook for the debt.

Who Can Take Out a Parent PLUS Loan?

Not just anyone can stroll into the financial aid office and snag a Parent PLUS Loan. There are a few eligibility requirements:

- The borrower must be a biological, adoptive, or (in some cases) step-parent of a dependent undergraduate student.
- The student must be enrolled at least half-time in an eligible college or university.
- The borrower must pass a basic credit check—but don’t panic, the standards are much lower than with private loans.

If your parents have less-than-stellar credit, they might still qualify if they can find a creditworthy endorser (basically, a co-signer).

How Much Can Parents Borrow?

A Parent PLUS Loan lets parents borrow up to the full cost of attendance, minus any other financial aid received. So, if your college costs $30,000 per year and you already got $10,000 in grants and scholarships, your parents could borrow up to $20,000.

Unlike federal student loans, there’s no set cap on borrowing. That’s both a blessing and a curse—because borrowing too much can lead to serious debt struggles down the road.

What’s the Interest Rate on Parent PLUS Loans?

Now, let’s talk numbers. Parent PLUS Loans come with a fixed interest rate, which means it stays the same over the life of the loan. The rate is set by the federal government and can change from year to year.

As of the 2023-2024 school year, the interest rate for Parent PLUS Loans is 8.05%—which is higher than undergraduate student loans. On top of that, there’s an origination fee (around 4.228%), which gets deducted from the loan amount before the funds even hit your school’s account.

How Do Repayments Work?

Unlike student loans, which come with a grace period, Parent PLUS Loans go into repayment right away. But don’t freak out just yet—there are some options:

- Immediate Repayment: Payments start as soon as the loan is disbursed.
- Deferred Repayment: Parents can request to postpone payments while their child is still in school and for six months after they graduate or drop below half-time enrollment. However, interest still accrues during this time.
- Graduated and Extended Plans: These offer lower starting payments or stretched-out terms to make repaying more manageable.

If repaying the loan becomes overwhelming, parents may also be able to switch to an income-contingent repayment plan (ICR), which bases the monthly payment on their income. This can help lower payments but may extend the loan term.

Can Parent PLUS Loans Be Forgiven?

The short answer? Kind of, but don’t count on it.

Parent PLUS Loans are not eligible for most student loan forgiveness programs, but there are a few exceptions:

- Public Service Loan Forgiveness (PSLF): If the parent works for a qualifying nonprofit or government organization and makes 120 qualifying payments under an Income-Contingent Repayment (ICR) plan, the remaining balance could be forgiven.
- Total and Permanent Disability Discharge: If the parent borrower becomes permanently disabled, they may qualify for loan discharge.
- Death Discharge: If either the parent borrower or the student passes away (knock on wood), the loan is discharged.

What Are the Pros and Cons of Parent PLUS Loans?

Like anything in life, there are upsides and downsides to Parent PLUS Loans. Let’s break it down:

✅ Pros:

- Can cover the full cost of college (after other financial aid is applied).
- Fixed interest rate, so there are no surprises down the road.
- Flexible repayment options, including deferment and income-contingent repayment.
- PSLF eligibility (in certain situations).

❌ Cons:

- Higher interest rates than student loans.
- Immediate repayment unless deferred.
- Parents—not students—are responsible for the debt.
- Origination fees take a cut out of the loan.

Are There Alternatives to Parent PLUS Loans?

If your parents aren’t keen on taking on more debt (understandable!), here are a few other ways to cover college costs:

- Scholarships and Grants: Free money = best money. Apply for as many as possible!
- Work-Study Jobs: Earn money while gaining experience.
- Private Student Loans: These sometimes offer lower interest rates than Parent PLUS Loans, but they require good credit.
- Tuition Payment Plans: Many colleges let you break tuition into smaller, interest-free payments.

Final Thoughts: Should Your Parents Take Out a Parent PLUS Loan?

Parent PLUS Loans can be a helpful tool, but they’re not always the best option. Before your parents sign on the dotted line, have an honest conversation about whether taking on this debt makes sense for your family.

If they do decide to borrow, make sure they understand the repayment terms and have a plan for handling the debt. And, hey—if your parents are helping fund your education, maybe offer to cook them dinner once in a while. It’s the least you can do.