Student loans 10 January 2023

Federal Parent PLUS Loan Interest Rates, Loan Eligibility, and Application Guide

If you are considering a Federal Parent PLUS Loan but don't know what the interest rates are, here is all the necessary information you need to make an informed decision.

Parents looking to finance their child’s education can take advantage of the Federal Parent PLUS Loan, which helps cover college costs not covered by other financial aid. This loan comes with an interest rate that is determined each year by Congress and the Department of Education. However, since these loans are not government-backed like other forms of aid such as interest-free student loans, the parent PLUS loan interest rate is higher and it requires a credit check from the parent or guardian. This means that parents should carefully consider their options before taking out this type of loan.

Additionally, Parent PLUS Loans do not offer grace periods for repayment after graduation, so it is important to calculate the cost of borrowing versus any other student loan alternatives that may be available. With thoughtful consideration and understanding of the process, Parent PLUS Loans can be a helpful tool in financing your student’s educational needs.

What are Parent PLUS Student Loans?

A Federal Parent PLUS Loan is a type of student loan offered to parents and guardians of dependent undergraduate students. It enables parents who do not qualify for private loans or other financial aid options to cover the cost of their child’s college education. The loan provides access to funds up to the cost of attendance (minus any other financial aid received) and the parent is responsible for repayment.

Pros & Cons of Parent PLUS Student Loans

Here are some of the benefits and drawbacks to consider when looking into Parent PLUS loans.


  • Long repayment periods which can extend up to 25 years
  • Ability to use loan funds to cover the full cost of attendance, minus other financial aid received
  • Flexible repayment plans are available 


  • Higher interest rates than other types of student loans
  • Parent’s credit history may be taken into account when determining eligibility
  • Requires a co-signer in some cases
  • Obligates parents to pay back the loan, even if the student does not complete their degree or drops out of school

Parent PLUS Loan Interest Rates 

It goes without saying that any potential borrower should carefully consider their options before taking out a Federal Parent PLUS Loan, or any loan for that matter. Parents or guardians should research the repayment terms, interest rates, and any other associated costs that come with this type of loan to ensure they understand the full cost of borrowing.

The Parent PLUS Loan interest rate is calculated using the 10-Year Treasury Note and adjusts annually based on the current economic environment. It is fixed for each year. The interest rate for this type of loan is based on the ten-year treasury rate plus a fixed margin of 4.6%. For loans disbursed in the 2020–2021 award year, for example, the interest rate is 5.30%. This rate applies for the duration of the loan.

Interest accrues on Parent PLUS Loans from the date of disbursement and begins to accrue immediately even if payments are deferred or in a grace period. For loans first paid out on or after July 1, 2022, and before July 1, 2023, the interest rate is 7.54%. For loans first disbursed on or after July 1, 2023, the interest rate will be 5.00%. This rate will also apply for the duration of the loan.

How to get a Parent PLUS Loan

To apply for a Parent PLUS Loan, it is essential that both the applicant and the child meet certain credit criteria, so make sure that you’re familiar with these requirements before applying. 

Eligibility Requirements

In order to qualify for a Parent PLUS loan, applicants must meet specific eligibility criteria. These requirements include the following:

Applicants must have a satisfactory credit history

To obtain a Parent PLUS Loan, applicants must not have an adverse credit history. This means they cannot have any debts that have been in default for 90 or more days during the two years prior to applying.

The applicant must be a U.S. citizen, permanent resident, or eligible noncitizen

All applicants must be U.S. citizens, permanent residents, or eligible noncitizens in order to apply for the loan. Additionally, the parent/guardian must have an SSN or ITIN in order to qualify.

Students must be enrolled at least part-time

In order for applicants to receive a Parent PLUS Loan, the parent’s child/dependent must be enrolled at least part-time in a degree-granting program at an eligible school.

The applicant must not have reached the aggregate loan limits

Applicants must also not exceed the cumulative loan limit for federal and private student loans. This is the total amount of all loans taken out for their child’s/dependent’s education.

The applicant must be the student’s biological or adoptive parent, guardian, or stepparent

To qualify for the loan, the applicant must be the student’s biological or adoptive parent, guardian, or stepparent. They must also have a legal responsibility to pay for the student’s education expenses.

It is important to note that although the Parent PLUS loan does have eligibility requirements, parents are typically able to obtain the loan due to favorable interest rates and flexible repayment plans. Furthermore, if a parent does not meet one or more of the requirements listed above, they may be able to apply for an endorser in order to gain approval for the loan. An endorser is an individual who agrees to repay the loan if the parent does not, and must also meet eligibility criteria in order to be approved.

Parent PLUS Loan Limit

With some loans, there is a maximum limit that you can borrow. However, the Parent PLUS Loan maximum amount is not set.

Parent PLUS loans do not have a defined or aggregate limit in terms of what you can borrow. Your loan amount is calculated by adding the student’s overall certified cost of attendance and any other financial aid that you are receiving is deducted from it. The financial add deducted may include any type of federal or private student loans, scholarships, and grants.

The cost of attendance is calculated by taking into account the following education-related expenses:

  • Tuition and fees
  • Room and board
  • Books
  • Equipment
  • Supplies
  • Transportation
  • Miscellaneous personal expenses

Steps to Apply for a Parent PLUS Loan

Applying for a Parent PLUS Loan requires the completion of a Free Application for Federal Student Aid (FAFSA) form. In addition to general personal and financial information, applicants must also provide documentation such as income tax returns in order to qualify. The interest rate on a Parent PLUS Loan is based on the 10-year Treasury note plus a fixed percentage. To apply for a Federal Parent PLUS Loan, here are the steps to follow:

#1 Determine Eligibility

In order to be eligible for a Federal Parent PLUS loan, the parent or guardian must not have an adverse credit history and must pass a background check. The student whom the loan is being taken out for must also meet eligibility requirements and be enrolled at least part-time in a degree program.

#2 Complete a FAFSA

A Free Application for Federal Student Aid (FAFSA) must be completed in order to determine the amount of money you are eligible to borrow. This form can be filled out online and will require information about your income, assets and any other financial aid you’ve received.

To apply for FAFSA, applicants will need the following:

  1. Social security number or Alien Registration Number
  2. Driver’s license/state ID/Passport (if applicable)
  3. W-2 forms and other records of money earned
  4. Federal income tax returns, including IRS 1040, 1040A, 1040EZ
  5. Bank statements and records of investments (if applicable)
  6. Records of untaxed income (if applicable)
  7. A list of schools the student is applying to.

#3 Apply for the Loan

Once you have determined your eligibility and completed the FAFSA, you can apply for the loan online through You must have an FSA ID in order to access this website.

#4 Accept Your Loan

If approved, your loan will be disbursed directly to your school’s financial aid office. It is important to note that you are not required to accept the loan, so make sure you understand all terms and conditions before accepting it.

#5 Complete Loan Entrance Counseling

The U.S Department of Education requires all borrowers to complete entrance counseling prior to receiving the loan funds. This counseling will go over important information regarding repayment and loan terms.

#6 Make Repayment

Once you’ve completed your education, it is time to start making payments on the loan. Most Parent PLUS loans are set up with a 10-year repayment plan, but this can be extended if needed.


Here are some frequently asked questions.

What is the interest rate for a Parent PLUS Loan in 2023?

For loans first paid out on or after July 1, 2022, and before July 1, 2023, the interest rate is 7.54%.

For loans first disbursed on or after July 1, 2023, the interest rate will be 5.00%.

Are there any fees associated with the loan?

Yes, there is a 4.236% origination fee associated with the loan which will be deducted from the total amount of the loan before it is disbursed.

Can I qualify for a Federal Parent PLUS Loan if I have bad credit?

You may still qualify for a Federal Parent PLUS Loan even if you have bad credit, but a satisfactory credit check will be required. Those with an adverse credit history may still qualify if they can demonstrate extenuating circumstances that show their present responsibility in managing their finances. Further information is available on the website: or you can contact the school’s financial aid office for more information.

When do I need to begin repaying my Parent PLUS Loan?

Generally, repayment begins within 60 days of the final loan disbursement. However, you may be able to postpone payments by applying for deferment or forbearance. It is important to contact your loan servicer for more information on repayment options.

Can you transfer a federal Parent PLUS Loan to a student?

You cannot transfer the loan directly to your student through the Department of Education. You can, however, refinance the Parent PLUS loan with a private lender. The private lender allows the child to take responsibility for the new private loan. So indirectly, your child will be paying for the parent Plus loan; however, they must be creditworthy for private lenders to allow them to take the repayment responsibility.

Can Parent PLUS Loans be forgiven?

Forgiveness for a Parent PLUS loan is highly limited and happens under certain circumstances only.

For example, the loan may be discharged in case of the death of the parent or the student, or if the parent who borrowed becomes permanently disabled. It is sometimes forgiven in case of bankruptcy too.

Final Thoughts

Parent PLUS Loans can be a great way to finance the education of your child. It is important to understand the interest rates associated with these loans so that you can make an informed decision about whether or not it is right for your family. By understanding all terms and conditions, you will be able to choose the loan that best meets your needs and budget. With the right knowledge and preparation, you can feel confident taking out a Federal Parent PLUS Loan and secure your child’s future.