Federal Direct Parental Loans for Undergraduate Students (PLUS)

Federal Direct PLUS Loans allow parents of dependent undergraduate students to borrow up to the full cost of college less other student aid. There is no need requirement for the PLUS loan, but the student must file a FAFSA and parents must pass a credit review in order to qualify for the loan. Repayment may be deferred for up to six months after the student is no longer enrolled at least half-time. However, interest does accrue on the loan and is capitalized into the loan principal before repayment begins. The interest rate on these loans is fixed at 5.30 percent. Federal Direct PLUS Loans have an origination fee of 4.2 percent.