What Are PLUS Loans?

What Are PLUS Loans?

PLUS loans (short for direct PLUS loans, the full government name for the program) are unsubsidized federal loans for parents of dependent undergraduate students. Unsubsidized loans are those that accrue interest at all times, unlike subsidized loans, which don't accrue interest when the student is in school or the loan is in deferment.

Until this year, PLUS loans were also available to graduate and professional students. The One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025, made substantial changes to PLUS loans that take effect on July 1, 2026. Here's what that means for borrowers.

Learn more: PLUS Loan Changes in 2026: What Borrowers Need to Know

Graduate PLUS Loans Will Be Eliminated

Graduate and professional students who are new to federal borrowing will no longer be able to take out PLUS loans starting with the 2026-27 school year. If you're a graduate or professional student who took out a direct unsubsidized or PLUS loan before July 1, 2026, and you stay enrolled in the same school and same course of study, you can continue to take out new PLUS loans for three years or until you earn your degree, whichever comes first.

Parent PLUS Loans Will Have New Caps

Previously, parents could borrow up to the full cost of attendance that remained after exhausting other types of financial aid. Starting this year, parents newly taking out PLUS loans can borrow up to $20,000 per dependent student, per school year, and up to $65,000 total per student.

Those who have taken out a parent PLUS loan in the past will be subject to the prior, more generous loan limits for up to three years under certain exceptions:

• First, the student must stay enrolled in the same school and course of study.
• Second, either the parent must have taken out a PLUS loan for that same program, or the student must have taken out a direct loan for that same program, before July 1, 2026.

Parent PLUS Borrowers Will Have Limited Repayment Options

If you're a current or new parent PLUS loan borrower, you'll only be able to repay the loans under a new tiered standard repayment plan, which splits the balance into fixed monthly payments over 10 to 25 years, depending on the size of the loan.

If you're a current borrower and you do not take out any new parent PLUS loans after July 1, 2026, you can choose between the standard, graduated and extended repayment plans. That means parent PLUS loans cannot be repaid under potentially more affordable income-driven repayment plans, unless you consolidate your parent PLUS loans into a direct consolidation loan before July 1, 2026, and do not take out a new parent PLUS loan after that date.

Learn more: How Student Loan Consolidation Works

Types of PLUS Loans

PLUS loans have historically been available to two groups: parents and graduate students. Here's a breakdown of each loan type.

Parent PLUS Loans

• Availability: Parent PLUS loans will continue to be available after July 1, 2026. But the amount you can borrow, per year and in total, will drop significantly. All parent PLUS borrowers will also have to repay their loans on the standard repayment plan starting on July 1, 2026. An exception applies to those who will take on no new loans after that date: These borrowers can repay their PLUS loans under the standard, extended or graduated repayment plans. Income-driven repayment is also available under certain conditions.
• Who qualifies: Parent PLUS loans are available to biological and adoptive parents, as well as some stepparents, whose children attend a qualifying school at least half-time. You must pass a credit check that's specific to the U.S. Department of Education. If you don't pass, you can either take out the loan with an endorser, or cosigner, who has good credit or you can sufficiently explain the circumstances that led to the negative mark.
• Key features: Unlike other loan types, parent PLUS loans don't come with an automatic deferment of payments while the student is in school or for the six months after they're no longer enrolled. You must request a deferment when you apply for a PLUS loan or via your student loan servicer.

Grad PLUS Loans

• Availability: New borrowers will not be able to take out graduate PLUS loans after July 1, 2026. If you're currently in school and you previously took out a graduate PLUS loan before that date, you can continue to borrow for up to three years (or until you leave school, whichever comes first). There are also new limits to the amount graduate students can borrow in federal loans: $100,000 in total for a graduate program and $257,500 in direct loans over your lifetime, which affects how much non-PLUS loan federal financing you can get.

• Who qualifies: Starting in the 2026-27 school year, some current students can continue to take out graduate PLUS loans for three years, or until the academic program ends, whichever comes first. You are only eligible to take out a PLUS loan for graduate or professional studies if:

  • You are enrolled at least half-time.
  • You don't have an adverse credit history.
  • You have been continuously enrolled in the same course of study since you started.
  • You took out a direct unsubsidized or graduate PLUS loan for that course of study before July 1, 2026.
• Key features: Graduate PLUS loans have historically had higher interest rates than other loan types: 8.94% for PLUS loans disbursed from July 1, 2025, to July 1, 2026, compared with 7.94% for direct unsubsidized loans for graduate or professional students. They also come with a loan fee, or origination fee, of 4.228% of the loan amount.

Who Should Consider a PLUS Loan?

Here are the groups of borrowers who can consider a PLUS loan starting in 2026, keeping the upcoming changes in mind:

• Current borrowers of parent and graduate PLUS loans: If you took out a PLUS loan for the most recent school year, you can continue to borrow for a limited time period. You also won't be subject to the new loan limits as long as the student continues the same course of study you previously took out PLUS loans to fund.
• Parents who can afford repayment under the standard repayment plan: Starting in 2026, new borrowers of parent PLUS loans won't be eligible to repay their loans under income-driven repayment plans. That's true even for parent PLUS borrowers who previously took out a PLUS loan. All parent PLUS borrowers will be placed on the tiered standard repayment plan, which lasts for 10 to 25 years, depending on the loan balance. Before you apply, ask the school's financial aid office to help you calculate how much your monthly payment will be so you can make sure it will be affordable.
• Parents who won't rely on Public Service Loan Forgiveness: The new standard repayment plan isn't an eligible repayment plan under the Public Service Loan Forgiveness (PSLF) program, a federal initiative that allows for loan forgiveness for certain borrowers in public service careers after 120 qualifying payments. That means parent PLUS borrowers who take out new loans after July 1, 2026, will not be eligible for PSLF.

Learn more: Things to Consider Before Applying for a Student Loan

How to Apply for a PLUS Loan

The application process for PLUS loans is a bit different from other federal loans. First, you'll have to fill out an additional form outside of the Free Application for Federal Student Aid (FAFSA) to request PLUS loans. And unlike other federal loans, a credit check happens during the application, and applicants with adverse credit history may not qualify.

Adverse credit history includes recent delinquency or bankruptcy, repossession, wage garnishments, tax liens or foreclosure on your credit report. However, if you have a poor credit history, you may be able to get approved for PLUS loans by adding an endorser to your application who has good credit history or sufficiently explaining the circumstances surrounding the issue. You must also participate in credit counseling.

Here's how to apply for PLUS loans:

1. Fill out the FAFSA. If you're a parent taking out PLUS loans for a student, the dependent student should fill out the FAFSA. You'll complete the FAFSA on your own behalf if you're applying for grad PLUS loans.
2. Go to StudentAid.gov. Start the application on the Education Department's PLUS loans page.
3. Enter student and borrower information. The PLUS loan application asks for information about the student, the borrower and the school. For graduate PLUS loans, the borrower and student information will be the same; for parent PLUS loans, it will be different. Then you'll see some loan options, including the choice to borrow the maximum available or a specific loan amount.
4. Get the results. A credit check happens at the end of the application, and you could get one of three responses: accepted, declined or pending. If you're declined because of your credit, you may be able to qualify after adding an endorser or submitting paperwork to explain the reason behind your adverse credit history, such as a divorce or identity theft.
5. Sign the promissory note. The final step is signing the master promissory note to certify your promise to repay the debt.

How to Prepare for the Elimination of Grad PLUS Loans

Graduate and professional students who will take out federal loans for the first time after July 1, 2026, won't have grad PLUS loans as a funding option. They can turn to these alternatives instead:

• Federal direct unsubsidized loans: Graduate and professional students can borrow up to $20,500 per school year in federal direct unsubsidized loans, which have slightly lower interest rates than former grad PLUS loans. You can borrow up to $100,000 in federal student loans for your graduate degree in total.
• Private student loans: Private student loans are credit-based loans provided by banks, credit unions, state agencies, schools and online lenders. They generally have less generous repayment terms than federal loans and higher interest rates. You'll likely need a cosigner if your credit score is below 670. But as a graduate student, you may have your own solid credit history, which could qualify you for more competitive interest rates.
• Federal and state grants: Unlike loans, grants don't need to be paid back. Federal grants include the TEACH Grant or Pell Grant for graduate students pursuing a teaching credential. States also provide education grants to residents. You can find your state's higher education agency, which administers grant programs for students, using the U.S. Department of Education's list of state contacts.
• Work-study: The federal work-study program offers graduate students financial aid in the form of part-time jobs on campus or in the community. You'll qualify if it's determined from your FAFSA that you have financial need.
• Institutional and external funding: Many graduate programs provide funding for students based on academic merit, sometimes in exchange for taking on a teaching or research workload. You can also get funding from federal agencies like the National Science Foundation. Search for external scholarships that match your background and course of study using the U.S. Department of Labor's scholarship search tool or UCLA's GRAPES graduate funding database.
• Employer assistance: As a graduate student, you may already have entered the workforce after completing undergrad. Ask your current employer if it offers tuition assistance or reimbursement programs, which may require you to stay in the same job for a certain amount of time after completing your program.

How to Repay PLUS Loans

PLUS loan repayment guidelines differ depending on the type of PLUS loan you have and whether you'll take out a new loan of either type on or after July 1, 2026.

• Current and new grad PLUS borrowers: Starting this year, all grad PLUS borrowers will be eligible for two repayment plans. You can choose between the tiered standard repayment plan, which lasts for 10 to 25 years, and the repayment assistance plan (RAP), a new income-driven repayment plan that splits up payments over 30 years and leads to forgiveness of any remaining balance at the end of the term. The RAP qualifies you for PSLF. If you only took out grad PLUS loans in 2025-26 or before and won't take out another in 2026-27, you can choose from among the several previously available repayment plans.
• Current and new parent PLUS borrowers: The only available repayment plan for parent PLUS loans as of this year will be the tiered standard repayment plan. If you're already in repayment and you take out a new parent PLUS loan for the 2026-27 school year, your loans in repayment will automatically switch to this new plan. If you took out parent PLUS loans in 2025-26 or before and will not take out a new one in 2026-27, you can repay your loans on the 10-year standard, extended or graduated repayment plans.

Tip: If you're a parent PLUS borrower and you want access to an income-driven repayment plan, you must consolidate your parent PLUS loans before July 1, 2026. You'll then be able to sign up for the income-contingent repayment plan (ICR). Your loans will then get switched automatically to income-based repayment (IBR) when ICR is eliminated on July 1, 2028.

The Bottom Line

PLUS loans are a type of federal student loan that can help make college accessible for undergrads and graduate students. Since much is changing in 2026 for PLUS loans, and the program is already complex, talk to your school about your funding and repayment options if you're confused. And, since PLUS loans require a credit check, be sure to check your FICO^® Score^{☉ Θ} before applying so you'll know whether you're likely to qualify.