Federal PLUS Loan Guide

Q: What’s the difference between a Graduate PLUS Loan and a Parent PLUS Loan?

A graduate PLUS Loan is a federal loan borrowed by a graduate or professional student—and they’re responsible for paying the loan back. A Parent PLUS Loan is borrowed by the parent of a dependent undergraduate student. The parent is responsible for paying back the loan.

Federal parent and graduate student loans are changing. Let’s break down the updates, look at your options, and help you make a plan.

Parent PLUS loans

Grad PLUS loans

Parent and student hugging in the backyard of a house.

What are parent PLUS loans?

Parent PLUS loans come from the U.S. Department of Education and are offered by schools that take part in the Federal Direct Loan Program.

The parent is the borrower and is responsible for paying back the loan.
The loans are unsubsidized. Interest begins to add up once the loan is sent to your school and continues to grow while you’re in school, deferment, and repayment. The interest rate is 8.94% for loans disbursed between July 1, 2025, and June 30, 2026, and there’s a 4.228% fee for loans disbursed after October 1, 2020.^{footnote 1}
Here’s how to apply: First, both you and your parent need to fill out the FAFSA^® (Free Application for Federal Student Aid). Next, you’ll follow the application process of your school’s financial aid office and fill out an application on the student aid website.

Graduate student smiling at office desk.

What are grad PLUS loans?

Grad PLUS loans come from the U.S. Department of Education and are offered by schools that take part in the Federal Direct Loan Program.

They’re borrowed by a grad or professional student. The student is responsible for paying back the loan.
The loans are unsubsidized. Interest begins to add up once the loan is sent to your school, and continues to grow while you’re in school, deferment, and repayment. The interest rate is 8.94% for loans disbursed on or after July 1, 2025, and before July 1, 2026, and there’s an origination fee of 4.228% for loans disbursed on or after October 1, 2020.^{footnote 2}
Here’s how to apply: First, you’ll need to fill out the FAFSA^® (Free Application for Federal Student Aid). Next, you’ll follow the application process of your school’s financial aid office and fill out an application on the student aid website.

What’s the latest on federal student loan changes?

Stay in the know—here’s the changes for federal student loans beginning in 2026-2027 school year^{footnote 3} and what it might mean for you:

Cap on federal parent borrowing: Parents can borrow up to $20,000 per student and per year, with a max lifetime limit of $65,000—for parent PLUS loans.

Cap on federal graduate borrowing: Graduate PLUS loans are going away and there are new lending limits through the Direct Unsubsidized Loan Program. Grad students will have a limit of $20,500 per year ($100,000 lifetime) and professional students will have a limit of $50,000 per year ($200,000 lifetime). The elimination of the grad PLUS loans primarily impacts those seeking new Grad PLUS loans after July 1, 2026. It provides an exception (of up to three academic years) for a student who is already enrolled in a program of study and received a loan for the program.

You’ve got some time to wrap your head around the updates and know that you still have options to cover the cost of school.

Cap on federal graduate borrowing: Graduate PLUS loans are going away and there are new lending limits through the Direct Unsubsidized Loan Program. Grad students will have a limit of $20,500 per year ($100,000 lifetime) and professional students will have a limit of $50,000 per year ($200,000 lifetime). The elimination of the grad PLUS loans primarily impacts those seeking new Grad PLUS loans after July 1, 2026. It provides an exception (of up to three academic years) for a student who is already enrolled in a program of study and received a loan for the program.^{footnote 4}

You’ve got some time to wrap your head around the updates and know that you still have options to cover the cost of school.

What could this mean for you?

The PLUS loan changes might leave you with some questions on what to do next. The good news? You don’t need to press pause on your goals.

Scholarships and grants are still there for you—and you should always apply for as much free money as you can. If you still need money for school, our flexible private student loans aren’t changing and can also help you stay on track.

What's the difference between private student loans and federal student loans?^{footnote 5}

Federal student loans are backed by the government. Private student loans are offered by banks (like us), credit unions, and other financial institutions—and your credit determines if you’ll be approved and what your interest rate will be.

If you don’t have a credit history yet, having a cosigner may help you get approved and may even lower your rate. Last year, students were 4x more likely to get approved with a cosigner.^{footnote 6}

$9 Billion+

in Sallie Mae loans disbursed with lower rates than a Parent or Grad PLUS loan

93,000+

Undergrad customers got a better rate than PLUS loans last year.

93,000+

415,000+

students and their families over the past 10 years secured a lower rate with Sallie Mae than a Parent or Grad PLUS loan

Compare loan options to see what works best for your goals

	Sallie Mae private student loans	Federal Direct PLUS Loans^{footnote 7}
No origination fees
Less than half-time enrollment eligibility
Fixed and variable interest rate options
Cover up to 100% of the cost of attendance minus financial aid^{footnote 8}
Rate reduction when you enroll in auto debit^{footnote 9}
Credit check required

How can parents help their students?

With the changes to parent PLUS and federal student loans for graduate students, you might be wondering about your next steps. We’re committed to helping families get to and through college. Has your student applied for scholarships and grants yet? Free money always comes first.

If you still need extra to cover college costs, you can apply as a cosigner on our private student loans to help your student get approved. Well-qualified applicants may also get a better rate than PLUS loans and save money overall with no origination fees. Your student can always decide to apply for cosigner release^{footnote 10} after 12 months of on-time principal and interest payments and when credit plus other eligibility requirements are met if they want to take full responsibility for the loan.

Your next steps? They start here.

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FAQs

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What are the eligibility criteria for a parent PLUS loan?

To be eligible for a parent PLUS loan, you must:

Be the biological or adoptive parent (stepparents may also be eligible)
Have a good credit history
Meet the general eligibility requirements for federal student aid

If you’re not initially approved, you may be able to add an endorser. An endorser must remain on the loan for the full life of the loan.

What are the parent PLUS loan interest rates?

As of July 1, 2025, the interest rate for parent PLUS loans is a fixed 8.94% for the 2025-2026 academic year. There’s also a 4.228% loan origination fee on all Direct PLUS Loans disbursed on or after October 1, 2020, and before October 1, 2026. The fee is a percentage of the loan amount and is deducted from each loan disbursement.

What are the grad PLUS loan interest rates?

As of July 1, 2025, the interest rate for grad PLUS loans is a fixed 8.94% for the 2025-2026 academic year. There’s also a 4.228% loan origination fee on all Direct PLUS Loans disbursed on or after October 1, 2020, and before October 1, 2026. The fee is a percentage of the loan amount and is deducted from each loan disbursement.

How do I apply for a PLUS Loan?

To apply for a PLUS loan, you have to submit the Free Application for Federal Student Aid (FAFSA^®) first. Then, you will fill out an application for a parent PLUS loan or a grad PLUS loan. PLUS loans require a credit check, so you may need to apply with a creditworthy cosigner to be approved. If you’re approved for the loan, you’ll sign your Mastery Promissory Note (MPN) and be good to go.

What’s the difference between a graduate PLUS loan and a parent PLUS loan?

A graduate PLUS loan is a federal loan borrowed by a graduate or professional student—and they’re responsible for paying the loan back. A parent PLUS loan is borrowed by the parent of a dependent undergraduate student. The parent is responsible for paying back the loan.

How do I apply for a private student loan?

You can fill out a student loan application right on the lender’s website. There’s no cost to apply. You’ll be asked to enter some basic personal and financial information, and choose the type of interest rate and repayment plan you want for your loan. If you’re applying with a cosigner, they’ll also need to provide their financial info. Remember that the lender will do a credit check to see if you’re eligible for a loan, so your credit score may be affected by applying.

Do Sallie Mae loans have origination fees?

Our private student loans don’t have any origination fees but parent PLUS and grad PLUS loans both have origination fees. The PLUS origination fee is 4.228% for loans disbursed on or after October 1, 2020, and before October 1, 2026.

footnote Borrow responsibly
We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.

footnote 1. Source: https://studentaid.gov/understand-aid/types/loans/plus/parent.

footnote 2. Source: https://studentaid.gov/understand-aid/types/loans/plus/grad.

footnote 3. Source: https://www.npr.org/2025/04/30/nx-s1-5381149/trump-republicans-student-loan-repayment#:~:text=Changes%20coming%20to%20grad%20PLUS,and%20professional%20programs%20%28$150,000%29.

footnote 4. Source: https://www.congress.gov/bill/119th-congress/house-bill/1

footnote 5. Explore federal loans and compare to make sure you understand the terms and features. Private student loans that have variable rates can go up over the life of the loan. Federal student loans are required by law to provide a range of flexible repayment options, including, but not limited to, income-based repayment and income-contingent repayment plans, and loan forgiveness and deferment benefits, which other student loans are not required to provide. Federal loans generally have origination fees, but are available to students regardless of income.

footnote 6. Based on a comparison of the percentage of students who were approved with a cosigner to the percentage of students who were approved without a cosigner from October 1, 2023 to September 30, 2024.

footnote 7. Federal loan rate and fee information is provided by Federal Student Aid, an Office of the U.S. Department of Education.

footnote 8. For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time.

footnote 9. The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment.

footnote 10. Only the borrower may apply for cosigner release. To do so, they must first meet the age of majority in their state and provide proof of graduation (or completion of certification program), income, and U.S. citizenship or permanent residency (if their status has changed since they applied). In the last 12 months, the borrower can’t have been past due on any loans serviced by Sallie Mae for 30 or more days or enrolled in any hardship forbearances or modified repayment programs. In addition, the borrower must have paid ahead or made 12 on-time principal and interest payments on each loan requested for release. The loan can’t be past due when the cosigner release application is processed. The borrower must also demonstrate the ability to assume full responsibility of the loan(s) individually and pass a credit review when the cosigner release application is processed that demonstrates a satisfactory credit history including but not limited to no: bankruptcy, foreclosure, student loan(s) in default or 90-day delinquencies in the last 24 months. Requirements are subject to change.

footnote Sallie Mae loans are made by Sallie Mae Bank.

footnote Information advertised valid as of 7/28/2025.

footnote SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.