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How Does the Parent PLUS Loan Work?

how does a parent plus loan work

By: Gaurav Bhola, MSM, Managing Editor

As the cost of higher education rises, so does the need for student loans. College loans are now necessary to subsidize an education. In addition to students, parents can borrow money for a school to help their children with college tuition and other educational expenses. The PLUS loan is available to parents of children enrolled at least half time in an eligible school program.

Parent PLUS Loans can help parents pay up to 100% of college and university costs. Here are a few things to know about PLUS loans .

Parent PLUS loan

The PLUS loan is a non-need-based program available for college education expenses.

Loan borrower

The loan program is offered only to parents of part-time students. A parent is defined

as a custodial or non-custodial parent, or a step-parent. Under federal guidelines, a parent is not defined as a legal guardian or relative.

Eligibility criteria


  • Responsible for the repayment of the loan on behalf of the dependent student.
  • Must meet certain federally dictated creditworthiness standards.

Student is:

  • Part-time enrollment of at least 6 credits.
  • Must meet specific satisfactory academic requirements.

Parents & Student are:

Annual loan limits

The annual PLUS loan limits are equal to the total educational costs minus all other financial aid (Other Student Loans, Scholarships, and Grants ). For example, if the cost of education is $10,000 and you receive $2,000 of financial aid, your parents finance $8,000 of educational expenses.

Category: Credit

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