Parent PLUS Loans
PLUS loans are government-guaranteed loans with fixed interest rates. Until recently, these loans were known as parent PLUS loans, and only offered to parents of undergraduates, but now they're also available to graduate and professional degree students. The federal government acts as the lender for Direct PLUS Loans, while you will need to find a private lender for FFEL PLUS Loans.
Note: Parents applying for PLUS loans do not need to file a FAFSA, whereas graduate and professional students do.
Am I eligible?
Parents of dependent undergraduate students, graduate students or professional degree students can use PLUS loans. You must be enrolled at least half time to qualify for a PLUS loan. In addition, you must typically have good credit to qualify.
How much can I borrow?
Students can borrow up to the annual Cost of Attendance minus any financial aid they've already received. Much like Stafford loans, once the school takes their cut, you're free to spend the money however you choose.
Where can I spend the money?
You can use PLUS loans to pay for tuition and education-related expenses, such as books and housing.
Interest Rates and Fees
According to the U.S. Department of Education's 2007-08 Guide to Federal Student Aid, PLUS loans have a fixed interest rate of 7.9 percent for Direct PLUS loans and 8.5 percent for FFEL PLUS Loans. In addition to interest, you may have to pay up to 4 percent of the loan amount in fees.
next page
Now that you understand the loans detailed in Parent PLUS Loans | Understanding PLUS Loans, read about Federal Perkins loans on the next page, Perkins Loan | Understanding Perkins Student Loan.