Direct PLUS Loan
What Is a Direct PLUS Loan?
Direct PLUS Loan is a category of federal student loan available to parents of dependent undergraduate students and to graduate or professional students.
It includes both Parent PLUS Loans and Grad PLUS Loans.
Direct PLUS Loans require a credit check and allow borrowing up to the cost of attendance minus other financial aid.
Why It Matters
Direct PLUS Loan:
- Expands borrowing capacity
- Requires credit approval
- Accrues interest immediately
Because borrowing limits are high, total repayment costs may be significant.
How Direct PLUS Loan Works
Direct PLUS Loan is issued by the U.S. Department of Education after credit evaluation.
Example: A parent or graduate student approved for a Direct PLUS Loan may borrow remaining educational costs not covered by other federal aid.
Interest accrues upon disbursement.
Repayment typically begins shortly after funds are released unless deferred.
Direct PLUS Loan vs. Direct Subsidized Loan
Direct PLUS Loan → Credit-based with immediate interest accrual
Direct Subsidized Loan → Need-based with interest protection
Eligibility and interest structure differ.
FAQs About Direct PLUS Loans
Can PLUS loans be consolidated?
They may be consolidated into a Direct Consolidation Loan.
Do PLUS loans qualify for forgiveness?
Eligibility depends on loan status and repayment plan.
Are rates fixed?
Federal Direct PLUS Loan rates are typically fixed for the life of the loan.
Related Terms
