Parent PLUS loans have higher interest rates and charge more fees than other federal student loans. On top of that, they have worse repayment options and protections.* Still, there’s room to choose a strategy that works for you.
Parent PLUS Loan borrowers are eligible for four repayment plans:
You’ll pay off parent loans the fastest and save the most money with the Standard Plan. But your payments will be higher than if you moved to the Graduated or Extended plans, both of which allow you to stretch the repayment period from 10 to 20+ years.
The Income Contingent Repayment Plan is a good option if you have a loan balance. It caps your monthly payments at 20% of your discretionary income and puts you in a position to get your loan balance forgiven after 20 years of payments or after a decade of working full-time in public service.
Note: Before switching to the ICR plan, you’ll need to consolidate your Parent PLUS Loans into a Direct Consolidation Loan. You can do that on the Federal Student Aid website, StudentAid.gov.
Related: How to Consolidate Parent PLUS Loans
Use the Loan Simulator to estimate your monthly payment amount under the different loan repayment plans. Here are other options if you can’t afford Parent PLUS Loan payments.
* The school determines the loan amount for Parent PLUS Loans based on the cost of attendance. That cost is frequently higher than what most students pay. Combine that with the rising cost of college, and parents end up borrowing a lot more in Direct Plus Loans than they intended when they first got their child’s financial aid package.