Direct PLUS loans are federal, unsubsidized student loans for graduate/professional students and parents of undergraduate students. Grad students and parents can apply for PLUS loans through FAFSA and can potentially receive enough financial assistance to cover the entire cost of tuition, fees, and room and board. To qualify, borrowers must be a parent of a dependent, postsecondary student or a graduate/professional student enrolled at least half-time at an eligible school, and have good-standing credit.
PLUS loans have a fixed interest rate (currently at 7% for loans disbursed before July 1, 2018). The is also a loan fee on all Direct PLUS loans which is approximately 4.3% for loans disbursed before October 1, 2018.
There are several repayment options available, and some repayment plans are only available to graduate borrowers. Depending on the plan you choose, you’ll like have repayment between 10 to 25 years. Remember, parent-borrowers are legally responsible for repaying their loan. There is no option to transfer Direct PLUS loans to your child.