This loan can also be referred to as Direct PLUS Loans. It is a federal loan made and aimed for higher education and offered for parents of undergraduate, graduate, or professional students.

PLUS Loans

The acronym stands for Parent Loan for Undergraduate Students. As it is a federal student loan, it is offered through the U.S. Department of Education’s William D. Ford Federal Direct Loan program. Simply put the federal government are in charge of this loan, and they disburse the money to applicants.

PLUS Loans

Before a parent can be eligible for PLUS Loans, the student must enrol or have been enrolled in at least half-time with the Federal Direct Loan program supported school. The loan body will have to verify the cost of educational needs from the applicants’ school to disburse the funds. After clearing all of the educational finances, the rest are sent directly to the parent of the student.

This is a type of loan with a fixed interest rate aimed for the entire school period. The interest on federal loans has been suspended during the coronavirus crisis by President Trump on March 13th, 2020.

How to Qualify for a PLUS Loans

The parent of the student must fill out the Free Application for Federal Student (FASFA) under which a credit check will be offered. While graduates or professional degree students qualified for this loan will fill the form themselves.

To get this loan, the student must be dependent on their parents or guardian. This is because both the student and the parent have roles to play during the application.

Advantages of PLUS Loans

The best features and benefits of this loan include:

  • Applicants can borrow loans without being asked of the need.
  • This loan is relatively low-interest rates and it is a fixed interest-based loan.
  • Since it leverages parents to borrow as much as needed for their child’s education, it stands as a number one benefit of this loan among others.

Disadvantages of PLUS Loans

Below are some setbacks on this loan type:

  • This loan demands that parents must be passed through credit checks to determine their eligibility for the loan.
  • There is a loan fee charged over the loan and will be deducted from each disbursement received.
  • The repayment responsibility can’t be transferred to students even after they must have graduated and are working.

That’s it,

Repaying PLUS Loans

Repayment of the loan begins as soon as the entire loan has been disbursed. Meaning, you can start paying back the loan while you are still a student in school or you seek deferment. For a better advantage, you should better start paying back the loan while you are still in school. There are various repayment plans for parent PLUS Loans, they include:

Standard Repayment Plan

This plan offers applicants into paying monthly fixed payments for up to 10 years. Though in the midst of one parent having more than one of these loans, you can extend the repayment period to above 30 years.

Graduated Repayment Plan

Payments are made within about 10 years. But the interest will never move from a low to a high rate after two years.

Extended Repayment Plan

This is for borrowers who owe over $30,000 indirect loans. It will leverage you with 25 years to pay off your loans either by fixed or graduated payments.


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