Federal PLUS Loan Review

Federal PLUS loans let graduate students and parent borrowers fill tuition gaps not covered by other types of financial aid.
Cecilia ClarkSep 13, 2021

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Student loan ratings

Department of Education
  • Federal parent loan

  • Federal graduate loan

The bottom line: Federal PLUS loans are available to parents of undergrads as well as graduate students. They are best for parents who may need the safety net they offer, and for grad students who have hit limits on lower-interest unsubsidized loans.

Federal parent loan review

Federal Parent PLUS Loan

Federal Parent PLUS Loan

5.0

NerdWallet rating 
Fixed APR

6.28 - 6.28%

Min. Credit Score

None

Pros

  • More flexible repayment options for struggling borrowers compared with private lenders.
  • All borrowers who attend a school authorized to receive federal aid can qualify.

Cons

  • May have higher interest rates compared with private lenders.
  • You pay an origination fee.
  • You can’t see if you’ll qualify without a hard credit check.

Best for parents who want the safety net federal loans offer.

The direct PLUS loan is a federal student loan that can be taken out by parents to help pay for their child’s college education, or by graduate and professional degree students.

The interest rate for federal direct PLUS loans is 6.28% for 2021-22. There is also an origination fee of 4.228%, which is deducted from each loan disbursement.

PLUS loans are more like private loans than they are like other types of federal loans: They require a credit check and, for parents, come with fewer repayment options.

Interest rates on PLUS loans rose for the 2021-22 academic year after hitting record lows for the 2020-21. The rates on PLUS loans may be comparable to what you could receive through a , but PLUS loans have large origination fees most private loans lack.

If you have good credit and don't need federal student loan benefits, shop around for a private loan before committing to a PLUS loan to compare overall costs.

Federal PLUS loans may be the best option for you, but they're not perfect. They could improve by:

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NerdWallet recommends federal student loans over private loans in almost all cases. But PLUS loans have some features that may make a private loan a more desirable option. As a general rule, take out student loans in this order:

» MORE:

PLUS borrowers must go through an additional step beyond submitting the Free Application for Federal Student Aid, known as the FAFSA. Here’s what to do:

How does this loan compare?

CommonBond Private Student Loan
College Ave Parent Student Loan
NerdWallet rating 
NerdWallet rating 
Check RateCheck Rate
Fixed APR

3.99 - 10.99%

Fixed APR

3.24 - 12.99%

Variable APR

4.13 - 9.64%

Variable APR

1.04 - 11.98%

Min. Credit Score

660

Min. Credit Score

Mid-600s

Federal graduate loan review

Federal Grad PLUS Loan

Federal Grad PLUS Loan

5.0

NerdWallet rating 
Fixed APR

6.20 - 6.28%

Min. Credit Score

None

Pros

  • More flexible repayment options for struggling borrowers compared with private lenders.
  • All borrowers who attend a school authorized to receive federal aid can qualify.

Cons

  • May have higher interest rates compared with private lenders.
  • You pay an origination fee.
  • You can’t see if you’ll qualify without a hard credit check.

Best for graduate students who need to borrow beyond the federal unsubsidized loan limit.

NerdWallet believes the best student loan is one you can repay at the lowest interest rate you can get. That’s why NerdWallet’s student loan ratings reward lenders that offer a variety of loan terms, limit their fees and penalties, and extend borrowers multiple options to avoid default. Points are also awarded for soft credit checks, underwriting transparency and other consumer-friendly features. Use these ratings as a guide, but we encourage you to shop around for the lowest interest rate you can qualify for. NerdWallet does not receive compensation for its reviews. Read our .