What is the interest rate on Parent PLUS loans?

For the 2025-2026 school year, Parent PLUS loans have a fixed interest rate of 9.08%, plus a 4.228% loan origination fee. This makes PLUS loans significantly more expensive than federal Direct Subsidized (6.53%) and Unsubsidized (6.53%) loans available to students.

Can Parent PLUS loans be forgiven?

Parent PLUS loans are not directly eligible for most forgiveness programs. However, if you consolidate a PLUS loan into a Direct Consolidation Loan, it becomes eligible for Income-Contingent Repayment (ICR) and potentially Public Service Loan Forgiveness (PSLF) after 10 years of qualifying payments. The more favorable SAVE/PAYE/IBR plans are not available for PLUS loans.

Is it better to take out Parent PLUS loans or cosign private loans?

Parent PLUS loans offer federal protections (deferment, forbearance, ICR, potential PSLF after consolidation) that private loans lack. However, PLUS loans have higher interest rates than some private loans for borrowers with excellent credit. For most families, exhaust federal student loans first, then compare PLUS loan costs to private loan offers before borrowing.

Parent PLUS Loans: Rates, Limits, and Repayment Options (2026)

Parent PLUS loans let parents borrow up to the full cost of attendance for their child’s college education. But with a 9.08% interest rate and significant fees, they should be a last resort after exhausting other funding sources.

Parent PLUS Loan Overview

Feature	Details
Interest rate (2025-2026)	9.08% fixed
Origination fee	4.228% (deducted from disbursement)
Borrowing limit	Up to cost of attendance minus other aid
Credit check	Yes (but no minimum credit score)
Borrower	Parent (not the student)
Repayment starts	60 days after final disbursement (or with deferment while student is enrolled)

Cost of Parent PLUS Loans

Monthly Payment and Total Cost Examples

Amount Borrowed	Origination Fee	Net Received	Monthly Payment (10-year)	Total Paid Over 10 Years	Total Interest
$10,000	$423	$9,577	$124	$14,880	$4,880
$25,000	$1,057	$23,943	$311	$37,320	$12,320
$50,000	$2,114	$47,886	$621	$74,520	$24,520
$100,000	$4,228	$95,772	$1,242	$149,040	$49,040
$150,000	$6,342	$143,658	$1,863	$223,560	$73,560

4-Year Borrowing Scenario

Year	Amount Borrowed	Running Total (with Interest)
Freshman	$25,000	$25,000
Sophomore	$25,000	$52,270 (Year 1 accrued interest)
Junior	$25,000	$82,018
Senior	$25,000	$114,475
At graduation	$100,000 borrowed	~$114,000+ owed

Eligibility Requirements

Requirement	Details
Relationship	Biological or adoptive parent (stepparent if on FAFSA)
Student enrollment	At least half-time at eligible school
FAFSA completed	Must file FAFSA first
Credit history	No adverse credit history (but NO minimum credit score)
Citizenship	US citizen or eligible non-citizen

What Counts as Adverse Credit History

Disqualifying Events (Within Past 5 Years)	Examples
Bankruptcy discharge	Chapter 7 or 13
Foreclosure	Home foreclosure
Repossession	Vehicle or property
Tax lien	Federal or state
Wage garnishment	Court-ordered
Default on federal student loan	Previous default
Accounts 90+ days delinquent	Collections, charge-offs

If Denied Due to Credit

Option	Details
Appeal with extenuating circumstances	Document the situation to the Department of Education
Get an endorser	Someone with acceptable credit co-signs (similar to cosigner)
Student gets additional unsubsidized loans	Up to $4,000-$5,000 more per year

Repayment Plans Available

Plan	Monthly Payment	Repayment Period	Eligibility
Standard	Fixed (~$124/per $10K borrowed)	10 years	All PLUS loans
Graduated	Starts low, increases every 2 years	10 years	All PLUS loans
Extended (fixed)	Lower fixed amount	25 years	Balance over $30,000
Extended (graduated)	Starts low, increases	25 years	Balance over $30,000
Income-Contingent (ICR)*	20% of discretionary income	25 years (forgiveness after)	Only after consolidation

*ICR is the ONLY income-driven plan available for Parent PLUS loans (after consolidation). SAVE, PAYE, and IBR are NOT available.

Repayment Comparison: $75,000 in Parent PLUS Loans at 9.08%

Plan	Monthly Payment	Total Paid	Total Interest	Forgiveness?
Standard (10-year)	$932	$111,840	$36,840	No
Graduated (10-year)	$540-$1,600	~$118,000	~$43,000	No
Extended (25-year)	$631	$189,300	$114,300	No
ICR (25-year, $60K income)	Varies (~$500-800)	Varies	Varies	Yes (taxable)

PSLF for Parent PLUS Loans

How to Qualify for Public Service Loan Forgiveness

Step	Action
1	Consolidate Parent PLUS loan into a Direct Consolidation Loan
2	Enroll in Income-Contingent Repayment (ICR) plan
3	Work full-time for a qualifying public service employer
4	Make 120 qualifying payments (10 years)
5	Remaining balance forgiven tax-free

Important: Consolidation resets your payment count to zero. Unused Parent PLUS payments before consolidation don’t count toward PSLF.

Parent PLUS vs Private Student Loans

Feature	Parent PLUS	Private Student Loans
Interest rate	9.08% (fixed)	4-14% (variable or fixed, credit-dependent)
Origination fee	4.228%	Usually none
Credit-based pricing	No (pass/fail credit check)	Yes (better credit = lower rate)
Income-driven repayment	ICR only (after consolidation)	Not available
Deferment/forbearance	Yes	Limited (varies by lender)
PSLF eligible	Yes (after consolidation)	No
Death/disability discharge	Yes	Varies by lender
Cosigner release	N/A	Some lenders offer after 24-48 payments
Borrower	Parent only	Student with parent cosigner

When Each Makes More Sense

Situation	Better Choice
Parent has poor credit but no adverse history	Parent PLUS (private likely denied or expensive)
Parent has excellent credit (750+)	Private loan (may get lower rate than 9.08%)
Parent works in public service	Parent PLUS (PSLF eligible after consolidation)
Want income-driven repayment option	Parent PLUS (ICR after consolidation)
Want the lowest rate possible	Private loan (if excellent credit)
Parent has good credit, student has none	Either (parent cosigns private or takes PLUS)

Alternatives to Parent PLUS Loans

Alternative	Details	Savings
Student takes gap year to work/save	Earn $15,000-$25,000	Reduces total borrowing
Student works part-time in college	$5,000-$10,000/year	Reduces annual borrowing
Choose a less expensive school	In-state public vs private	$15,000-$30,000/year
Community college for 2 years	Transfer after associate’s	$30,000-$50,000 total savings
Additional scholarships	Even $1,000-$5,000 helps	Reduces PLUS loan need
Student takes max federal loans first	$5,500-$7,500/year at 6.53%	Lower rate than PLUS
Home equity loan/HELOC	7-9% typical, interest may be deductible	May beat PLUS rate + fees

Tax Implications

Tax Item	Parent PLUS Loans
Student loan interest deduction ($2,500 max)	Parent can claim if legally obligated and paying
Income limit for deduction	Phases out at $90,000 single / $185,000 MFJ
AOTC / Lifetime Learning Credit	Parent can claim if claiming student as dependent
Forgiveness taxable?	PSLF: tax-free. ICR forgiveness at 25 years: taxable as income

Tips Before Borrowing

Step	Action
1	Maximize free money first (FAFSA, scholarships, grants)
2	Student should take full federal loan amount ($5,500-$7,500/year)
3	Calculate total repayment cost, not just monthly payment
4	Compare PLUS loan to 2-3 private loan offers
5	Only borrow what’s needed (not the full amount offered)
6	Consider whether you can afford payments near retirement
7	Have a clear repayment plan before signing