FAQs
- What’s a PLUS loan?
- Am I eligible for a PLUS loan?
- How do I apply for a PLUS loan?
- How much can I borrow with a PLUS loan?
- My credit isn’t the greatest. Will this affect my ability to obtain a PLUS loan?
- I have a student loan in default. Can I still obtain a PLUS loan?
- Can my spouse and I apply for a PLUS loan together?
- Can I consolidate my PLUS loans through NextStudent?
- How much does a PLUS loan cost?
- What if I have trouble making my payments?
- If I’m temporarily not making any student loan payments because I’m in deferment or forbearance, am I still being charged interest?
- What happens if I decide to pay my PLUS loan off early?
- How will my PLUS interest rate be calculated?
- How long do I have to repay my PLUS loan, and what are my repayment options?
A PLUS loan (Parent Loan for Undergraduate Students) is a non-need-based federally guaranteed student loan available to qualifying parents of eligible undergraduate students. PLUS loans allow parents, regardless of income, to borrow up to 100% of their children’s college cost of attendance.
Am I eligible for a PLUS loan?
Any parent or legal guardian of an eligible undergraduate student can apply for a PLUS loan, as long as both parent and student meet the eligibility requirements.
How do I apply for a PLUS loan?
Just click here. Applying online is fast, easy and secure. You could have a preliminary approval in as little as 15 minutes!
For more details, visit our page on Applying for a PLUS loan. [LINK to Applying page]
How much can I borrow with a PLUS loan?
Each year, you can borrow up to the PLUS annual limit. The annual PLUS limit is your child’s cost of attendance, less any other financial aid your child has received (such as scholarships, grants, Stafford loans and work-study).
The cost of attendance is determined by the school, and can usually be found on the school’s website or obtained by calling the financial aid office. Besides tuition and room and board, the cost of attendance also includes other education-related expenses, such as student fees, books, supplies and a transportation allowance.
My credit isn’t the greatest. Will this affect my ability to obtain a PLUS loan?
To qualify for a PLUS loan, you need to be approved as creditworthy-meaning no derogatory items (such as collections, judgments, or bankruptcies) on your credit report for the past five years.
If you don’t think you can qualify, you can always apply with a creditworthy co-signer.
But don’t let credit issues stop you from applying! The experts on our NextStudent credit resolution team might be able to help you. With their help, nearly 90% of our PLUS and Grad PLUS loan applicants have been approved.
Even if you don’t get a preliminary approval right away, with our “second look” policy, we might be able to help you get past unresolved credit issues and approved for your PLUS loan.
I have a student loan in default. Can I still obtain a PLUS loan?
Unfortunately, if either you or your child have a federal student loan that’s currently in default (not including previously defaulted student loans that you’ve since rehabilitated), you won’t be able to obtain a PLUS loan. But if you’ve rehabilitated your defaulted student loans or made satisfactory repayment arrangements on them, you may still be able to qualify for a PLUS loan.
Can my spouse and I apply for a PLUS loan together?
No. Either parent can apply for a PLUS loan-parents can even take turns, each one applying in alternate years-but parents can’t apply together for the same loan.
Can I consolidate my PLUS loans through NextStudent?
Yes! As long as you have at least $20,000 in federal college loans and meet the consolidation eligibility requirements, you can consolidate with NextStudent and take advantage of all the benefits of a Student Loan Consolidation.
How much does a PLUS loan cost?
There’s no fee to apply for a PLUS loan.
Once awarded, every PLUS loan is subject to a 3% government origination fee (charged by the U.S. Department of Education) and a 1% guarantee fee (charged by the guarantor). These fees are taken out of the proceeds of the PLUS loan.
What if I have trouble making my payments?
Once you’ve received all your PLUS Loans, you can choose from different repayment options, such as income-sensitive and extended payment plans, which can help make repayment more affordable. For more details, see our answer to “What are my repayment options?” on this page.
If you’re experiencing financial difficulties, you may qualify for deferment or forbearance benefits. With the deferment and forbearance benefits that come with your PLUS loan, you may be allowed to temporarily postpone making payments without affecting your credit rating.
If I’m temporarily not making any student loan payments because I’m in deferment or forbearance, am I still being charged interest?
Yes. Your PLUS loan will continue to accrue interest while you’re in any deferment or forbearance period. Any unpaid interest that accrues during these postponement periods will be added to the principal of your PLUS loan for you to repay once your repayment resumes.
If you want to avoid having any accrued interest added to your principal PLUS loan balance, you can choose to make interest-only payments on your PLUS loan during either of these postponement periods.
What happens if I decide to pay my PLUS loan off early?
Then you’ve paid off your PLUS loan early! There are no prepayment penalties on Federal PLUS Loans, so you’ll never be charged extra fees for making more than the minimum payment or paying your PLUS loan off before it’s due.
How will my PLUS interest rate be calculated?
Any PLUS loans disbursed on or after July 1, 2006, have a fixed starting interest rate of 8.5%.
Federal PLUS Loans disbursed prior to July 1, 2006, have a variable interest rate. The variable rate on these PLUS loans adjusts on July 1 of each year, with a maximum allowable rate of 9.0%.
How long do I have to repay, and what are my repayment options?
The standard repayment term for a PLUS loan is 10 years. Your repayment will begin 30 to 60 days after the final disbursement of your PLUS loan funds.
Once you’ve received your final PLUS disbursement, you can also choose an alternate payment plan that could help make repayment more affordable.
- Extended Repayment: This repayment plan allows you to extend your repayment period up to a 25-year term, depending on your student loan amount. This option is available to you if your student loans total more than $30,000 and if you received your first student loan on or after October 7, 1998.
- Graduated Repayment: With this payment plan, your monthly payments start out lower and gradually increase over time.
- Income-Sensitive Repayment: Your monthly payments are based on your income. You’ll have to submit income documentation for this payment plan, and you have to requalify each year.
You can also consolidate your PLUS loans as soon as they go into repayment. Consolidating can give you up to 30 years to repay, depending on the total amount of your education loan debt . Click here for details.
What’s a PLUS loan?
Who qualifies?
How do I apply?
How much can I borrow?
How much does it cost?
What’s my interest rate?
What are my repayment options?
