October 6, 2006
PLUS Loans 101
Unfortunately with the current cap on Stafford Loans, it is nearly impossible to pay for all of a student’s tuition with just Stafford Loans.
The next step for many families is a PLUS Loan. PLUS Loans are taken out in the name of the parent or guardian, not the student. They are credit-based loans, though the credit requirements are generally much less stringent than housing, auto or private education loans.
Like the Stafford Loan, the PLUS Loan is a federal program, regulated by the government with a fixed interest rate that is capped by Congress. Currently, the PLUS Loan interest rate is 8.5%.
Unlike the Stafford Loan, a PLUS Loan allows you to borrow up to the cost of education (tuition, room & board and school fees) minus any other financial aid such as Stafford Loans, work study, scholarships, etc.