How to Apply for a Parent Plus Loan

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Higher education costs have risen drastically over the past several decades. And while most parents would like to help ease the financial burden for their children, many can’t afford to do so out of pocket.

That’s where a Parent PLUS loan comes in. This type of loan is offered to parents rather than students and helps cover the cost of a child’s education. However, these loans have some unique eligibility and repayment requirements.

Key Takeaways

• Parent PLUS loans are loans to parents to use to help their children pay for college.
• To qualify for a Parent PLUS loan, you must complete an online application, go through a credit check, and ensure your child has completed the FAFSA.
• Parent PLUS loans are available to all biological parents, adoptive parents, and stepparents.
• Alternatives to Parent PLUS loans include Direct federal loans for your child, private student loans, savings, and grants or scholarships.

How to Apply for a Parent Plus Loan

Applying for a Parent PLUS loan is a relatively straightforward process that, according to the Department of Education website, takes approximately 20 minutes to complete. Here are the steps to take to apply for a Parent PLUS loan:

1. Determine your eligibility.
2. Have your child complete the FAFSA.
3. Gather the necessary documents.
4. Decide how much you want to borrow.
5. Complete the Parent PLUS application.
6. Sign your Master Promissory Note.

Determine Your Eligibility

Before taking any additional steps, confirm that you’re eligible for a Parent PLUS loan. To be eligible for this loan, you must meet the following requirements:

• Be the biological parent, adoptive parent, or stepparent of a dependent undergraduate student
• Have a child that is enrolled in an eligible degree or certificate program
• Not have an adverse credit history
• Be a U.S. citizen or eligible non-citizen

Have Your Child Complete the FAFSA

Before you complete the Parent PLUS application, your child must complete their Free Application for Federal Student Aid (FAFSA). This form determines your child’s eligibility to receive federal financial aid to help them pay for school. Aid your child qualifies for can reduce the amount you need to borrow through a Parent PLUS loan.

Gather the Necessary Documents

To complete the Parent PLUS application, you’ll need:

• Your verified FSA ID
• Your requested loan amount
• The name of the school your child is attending
• Information about your child
• Information about yourself
• Information about your employer

Decide How Much You Want to Borrow

When you complete the Parent PLUS application, you’ll have two options. You can either request to borrow the maximum you’re eligible for, which is based on your child’s cost of attendance and other financial assistance, or you can request a specific amount.

When deciding how much to request, consider what other funds are available to help your child pay for school. Also, remember that you must repay everything you borrow, so it may not be advisable to borrow more than is necessary.

Complete the Parent PLUS Application

The Department of Education has a simple online application process that can be completed in 20 minutes. You can find the application on the Federal Student Aid website. However, some schools may have a different application process for their students. Before applying, find out if your child’s school has a different application process.

Applying for the Parent PLUS loan requires a credit check. If you have a freeze on your credit file, be sure to lift the freeze or the Department of Education won’t be able to process your application.

Sign Your Master Promissory Note

Before receiving your Parent PLUS loan funds, you must sign the Master Promissory Note required for all Direct PLUS loans. This promissory note is a legal agreement you sign agreeing to the loan’s terms, including how you repay the loan, including any interest and fees.

Compare Student Loans

Alternatives to a Parent Plus Loan

Parent PLUS loans can be effective tools to help pay for your child’s college education, but they aren’t right for everyone. Unlike other student loans, PLUS loans require a credit check, meaning not everyone will qualify. They also have less favorable interest rates and repayment plans than Direct Subsidized and Direct Unsubsidized loans.

Here are some alternatives to consider:

• Direct federal loans: If possible, consider having your child take out Direct Subsidized or Direct Unsubsidized student loans. These loans have lower interest rates than Parent PLUS loans, don’t have to be repaid while the student is in school, and can be put on income-based repayment plans after they graduate.
• Private student loans: If you don’t qualify for a Parent PLUS loan or can get a better interest rate elsewhere, consider applying for private student loans. You can either apply for private parent student loans or cosign your child’s private loans.
• Savings: If your child has some time before they head off to college, you can start saving now. While you may not be able to pay for the total cost of their education, you can reduce the amount they (or you) will have to borrow.
• Grants and scholarships: The best way to reduce the cost burden of college is to find other financial resources to reduce the amount your family is responsible for. Encourage your child to apply for grants and scholarships that could help cover their tuition.

Eligibility for private student loans, like Parent PLUS loans, is based on your creditworthiness. A poor credit score could prevent you from qualifying for a loan or result in a higher interest rate.

What Is Parent PLUS Loan Eligibility?

To be eligible for a Parent PLUS loan, you must be the biological parent, adoptive parent, or stepparent of an undergraduate student and not have an adverse credit history. Additionally, your child must be enrolled in an eligible degree or certificate program and must be a U.S. citizen or eligible non-citizen.

Is There Loan Forgiveness for Parent PLUS Loans?

Parent PLUS loans can be discharged if you die, the child for whom you borrowed dies, you become totally and permanently disabled, or you have your loan discharged in bankruptcy. You may also be eligible for student loan forgiveness in these situations:

• The school your child was attending closed before they could complete their program.
• Your loan eligibility was falsely certified by the school your child attended.
• Your student withdrew from school and the school failed to refund your loan when it was required to.
• You made payments for 25 years on a Direct Consolidation Loan on the Income-Contingent Repayment Plan.
• You qualify for Public Service Loan Forgiveness.

What Is the Maximum for a Parent PLUS Loan?

The most you can receive for a Parent PLUS loan is your child’s cost of attendance minus any other financial assistance your child receives. The cost of attendance generally includes tuition, room and board, books and materials, transportation costs, and other costs directly related to your child’s education.

Do Parent PLUS Loans Qualify for Biden Student Debt Relief?

Parent PLUS loans were to be eligible for forgiveness under the student debt relief the Biden administration announced in August 2022. However, that plan has since been blocked by the Supreme Court. Parent PLUS loans have been eligible for some of the other loan forgiveness actions the administration has taken.

1. U.S. Department of Education, Federal Student Aid. “Direct Plus Loans Are Federal Loans.”
2. U.S. Department of Education, Federal Student Aid. “Apply for PLUS Loan for Parents.”
3. U.S. Department of Education. “William D. Ford Federal Direct Loan Program.”
4. U.S. Department of Education. “U.S. Department of Education Offers Low-Interest Loans.”
5. U.S. Department of Education. “Student Loan Forgiveness.”
6. U.S. Department of Education “$39 Billion in Automatic Loan Forgiveness.”
7. U.S. Department of Education. “The Biden-Harris Administration Student Debt Relief Explained.”

Public Service Loan Forgiveness (PSLF) allows eligible federal student loan borrowers to have some of their debt forgiven when certain conditions are met.

A Stafford loan is a type of fixed-rate loan available to college and university undergraduate, graduate, and professional students attending college at least half-time.

An award letter is the FAFSA documentation sent from a college or university to the student that details how much financial support the student is eligible for.

An income-share agreement (ISA) is a contract that allows a student to receive upfront money for college in exchange for a fixed percentage of their future income.

Student Aid Index (SAI) is the name for the factor that determines needs-based financial aid—and there have been several changes to the equation.

A 529 plan is a tax-advantaged account that can be used to pay for qualified education costs, including college, K–12, and apprenticeship programs.

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