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PLUS Loans

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PLUS loans are obtained by a student’s parent and held in the parent’s name. Indeed, PLUS is shorthand for Parent Loan for Undergraduate Students (PLUS).

Like Stafford loans, PLUS loans come in two principal varieties - either FFELP (provided by private lenders) or Direct Loans (provided by the federal government via your school). PLUS Loans have a fixed interest rate of 8.5% and there is generally a 4% loan fee which is deducted from each disbursement check.

PLUS loans, unlike Stafford loans, are the responsibility of the parent as the student is not a signer to the PLUS loan promissory note. PLUS loans require a credit check which is mandated by the federal guidelines governing the program.

PLUS loans are considered an alternative to private student loans and families should discuss which option is best for them. While PLUS loans offer a fixed interest rate, the loan is only in the parent’s name whereas private loans are generally in the name of both the student, but a parent often cosigns. Different families have different values as to which product suits them so we encourage you to research all your options.

* Think Financial refers applications to Simple Tuition, a leading student loan comparison site, and is paid a fee for this referral.