Parent Loans for Undergraduate Students, or PLUS Loans, are Federally-insured loans for parents of dependent students. PLUS loans are offered to parents of college students enrolled at least half time in a post-secondary or graduate program, pending a credit check by the U.S. Department of Education.
Parents can take out a loan to pay for a student's educational expenses, as long as the student is a dependent undergraduate student enrolled at least half time. Parents can borrow up to the total cost of attendance minus any financial aid received directly by the student.
Direct PLUS loans are made available through schools participating in the U.S. Department of Education's Direct Loan program. To apply for a PLUS loan, the student borrower must first complete a Free Application for Federal Student Aid. Parents must then complete a Direct PLUS Loan application and a master promissory note, contained in a single form received from a school's financial aid office.
The U.S. Department of Education is the lender for all PLUS loans. Loan origination fees are 4% of the money borrowed, which are added to the monthly payment. Interest charges begin to accrue to the loan once disbursed. PLUS loans are eligible for deferment, but repayment must begin six months after the student ceases to be enrolled at least half time.