What Is a Parent Plus Loan?

By Robin Hartill, CFP – Updated Dec 18, 2025 at 12:31 AM EST

Key Points

Parent PLUS loans are federal loans for parents to fund a child's education, not transferable to the child.
Eligibility for a Parent PLUS loan requires a credit check and other financial criteria.
Repayment options include flexible federal plans; private loan refinancing moves debt to the child.

If you're seeking to help your child pay for college, a Parent PLUS loan will probably be an option. A Parent PLUS loan is a type of federal loan that's made to the parent of a dependent undergraduate student. Keep reading to learn about Parent PLUS loans and whether they're the right choice for your family.

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Two people standing with a graduate in cap and gown and holding their diploma. — Image source: Getty Images.

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Private Student Loans

Non-governmental loans used to fund education, provided by banks or lenders, often with varying terms and interest rates.

Taking out a Parent PLUS loan can be advantageous because the federal government gives you a number of flexible repayment options, which we'll discuss in the next section. With private student loans, however, the lender doesn't need to offer relief if you're struggling with payments.

One disadvantage of Parent PLUS loans is that you won't help your child build their credit since the debt is solely in the parent's name. If you cosigned a private loan for your child, you'd help them establish a credit history. However, since a Parent PLUS loan is taken out only by the parent, you won't have to worry about whether your child is keeping up with payments. If they default on a private loan with both of your names on it, the damage to your credit is the same as it would be if you defaulted on debt that's in your name.

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Credit Score

A prediction of your borrowing behavior, such as how well you pay off your debt.

If you're unable to afford payments, it's essential to talk to your student loan servicer as soon as possible. If your loan goes into default, your wages and tax refunds could be garnished. The federal government can also withhold as much as 15% of your Social Security benefits.

The National Foundation for Credit Counselors and the Financial Counseling Association of America are two good resources if you need help figuring out how to balance your Parent PLUS loans with your other financial obligations. Also, consider asking your child for help making your payments. They may not be legally responsible for the balance, but you took on that debt to finance their education.

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About the Author

Robin Hartill, CFP, is a contributing writer at The Motley Fool. Robin’s work has also been published by Yahoo Finance, USA Today, and Penny Hoarder. She is a graduate of the University of Florida.

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