Student loans are the way to cover tuition fees for many people. So are parent loans. These are student loans that parents take on behalf of their children.

If your child is a student, you might consider applying for a Parent PLUS loan. But first, let’s find out what is a Parent PLUS loan and how to qualify for a Parent PLUS loan.

What is a Parent PLUS Loan?

A Parent PLUS Loan is a type of loan the Federal Student Aid office provides to parents borrowing money to cover their children’s education. So if you’re a parent of a student, you can borrow up to the total cost of tuition fee minus any financial aid your child has already received.

How Do I Qualify for Parent PLUS Loan?

To qualify for a Parent PLUS loan, there are a few requirements you must meet:

1. Be the biological or adoptive parent (in some cases, the stepparent) of an undergraduate student who is enrolled at least part-time at an eligible school.
2. Not have a poor credit history (unless you meet additional qualifying requirements)
3. Meet the general eligibility requirements for a federal student loan

Note that grandparents (unless they’ve legally adopted the dependent student) and legal guardians aren’t eligible to receive a Parent PLUS loan. This rule applies even if they’ve had primary responsibility for raising the student.

How Do I Apply for Parent PLUS Loan?

If you qualify for a Parent PLUS loan, you can go ahead and start the Parent PLUS loan application.

Note that while most schools require you to apply for a loan online, some may have a different application process. The site linked above includes a list of all schools that participate in the direct loan program. Simply select your child’s school from the list, and you’ll see if the school accepts applications online or if it has a different application process.

In case your child’s school requires a different application process, check with the school’s financial aid office to find out how to request a Parent PLUS loan.

Also, make sure that your child has filled out the FAFSA form before you apply for a Parent PLUS Loan.

Parent PLUS Loan FAQ

How much can I borrow?

The maximum amount you can borrow is the cost of tuition at the school your child will attend, minus any other financial assistance they receive.

What is the current Parent PLUS Loan interest rate?

The Parent PLUS loan comes with a fixed interest rate of 6.28% for 2021-2022. 

Other than interest, is there an additional charge for Parent PLUS Loan?

Yes, there’s an additional loan fee on all Direct PLUS Loans. The loan fee is a percentage of the total loan amount and is proportionally deducted from each loan disbursement. 

The loan fee may vary from time to time, but it’s currently at 4.228%.

How will I receive my Parent PLUS loan?

First, the school will apply your Parent PLUS loan funds to your child’s school account to cover fees like tuition, room and board, and other fees. 

If any loan funds remain, the school will give them to you to help you pay other education-related expenses for your child. If you authorize, the school can even pay the remaining loan funds directly to your child.

What happens after I receive my Parent PLUS Loan?

After receiving your Parent PLUS loan, you’ll be contacted by your loan servicer to whom you’ll need to repay the loan. In addition, your loan servicer will provide regular updates on the status of your Parent PLUS loan.

Ready to Take a Parent PLUS Loan?

Parent PLUS loans are a useful option if you’re looking to help your children pay for college. What’s good about a Parent PLUS loan is that it’s relatively easy to qualify for, and you can apply for as much as you need.

However, along with benefits, Parent PLUS Loans also come with disadvantages like an origination fee and a relatively high interest rate.

To ensure that you’re not wasting money on fees and interest rates, our team at Best Student Loan recommends you consider private student loans before making a final decision.