What is a PLUS Loan? As a student, there are so many types of loans that are available at your fingertips for you to apply for. Many students attend school entirely on their own because they cannot afford higher education otherwise. But knowing the type of loan to go for as a student for your higher education is what is key. This is what brings us to what is a plus loan on this article today.

What is a PLUS Loan?

Today we are going to take a look at what it is and everything that you need to know about it. so that you can decide for yourself if going for a plus loan is the right move for you or not. That being said, let’s go ahead and jump in.

What is a PLUS Loan?

It can also be called a direct plus loan. This is the type of loan that is provided by the federal government for higher education that is only available to parents of undergraduate students. This loan is in addition to the loans that are available to graduate or professional students. The meaning of plus simply means a parent loan for undergraduate students.

These loans are usually offered by the US Department of Education, which means the government is the lender of these types of loans. The parents of an undergraduate student need to be eligible for this type of loan before they can be given one.

How does a PLUS Loan work?

The way a plus loan works are slightly different from the way other types of loans work. This is because it is the parents that are qualified for the loan, not the students. A parent needs to be eligible in order to apply and get accepted for a loan. That being said, for a parent to be eligible, the student must have enrolled at least half-time in a school that participates in the federal direct loan program.

This is because the money coming from the federal government has to go directly to the educational institution. It is the educational institution that applies this loan to expenses such as tuition, room and board fees, and other necessary school payments. When that is all accounted for, if there are any remaining funds, they are directly sent to the parents or to the student.

Finally, when it comes to a plus loan, they carry a fixed interest rate for the entire term of the loan. PLUS loans are usually not subsidized, which means that the interest accrues while the student is in school. A fee is charged to process the loan, which is called an origination fee.

Types of PLUS Loans

There are basically two types that are available to the public, and they are listed below:

  • Grad PLUS  loans
  • Parent PLUS  loans

Grad PLUS Loans

This is a loan that allows a graduate and a professional student to borrow money to pay for their own education. This means that students are on their own and must borrow a grad plus loan in order to cover all the costs of paying for higher education institutions not covered by other types of loans or grants. To qualify for a grad PLUS loan, a student must be enrolled in an eligible school in a graduate or professional program.

Parents PLUS Loan

This type allows the parents of a dependent student to borrow money to cover any cost not already covered by the student’s other financial aid package. This type can pay up to the full amount of the cost of attending a program at an eligible school. It is important to note that it is the financial responsibility of the parents and not the students.

Who is eligible for a PLUS Loan?

For someone to be eligible, there are two major criteria that they must meet. These are listed below:

  • Must be a parent of a dependent secondary school student who is working hard towards a post-secondary degree or a certificate.
  • Must also have an adverse credit history.
  • Must be enrolled in a school at least half the time that participates in the federal direct loan program.

How to Apply for a PLUS Loan

Above, you have seen some of the eligibility requirements for someone to apply for a direct plus loan and get it. If you meet this requirement, then you should get a direct plus loan application from your child’s school. Also, fill out a free application for federal student aid (FAFSA). Once that is done, the parents will have to pass a standard credit check.

Students can also apply for this on their own behalf. The student must also be dependent on a parent and should be a biological or adoptive child of a parent, grandparent, or stepchild. Both of them also meet the requirements for student aid, such as being citizens or having permanent residency in the country.


What is the benefit of a PLUS loan?

This is one of the best alternatives to getting a private loan because it helps you pay for all educational costs and expenses. These are the expenses of attending a school that is eligible for the PLUS loan program minus all other financial assistance. Keep in mind that the interest rate is fixed and the loan is applied towards your child’s education by the school itself.

What is the difference between a PLUS loan and an unsubsidized loan?

The major difference between both is the difference in the fees and interest rates. They have an origination fee and an interest rate that is higher than that of a direct unsubsidized loan. In fact, the loan fee of a direct unsubsidized loan is one-fourth of the fee of a PLUS loan.

How much money can you get from a PLUS loan?

The amount of money you get from a PLUS loan is equal to your total education expenses. This money, however, is not given to you; it is used to pay for these expenses, with the remainder sent to your parents or to you.


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