Payment, fee, and the true APR hiding in the fine print
| Academic Year | Rate | Origination Fee | True APR @ 10-yr ($30k) |
|---|---|---|---|
| 2022-23 | 7.54% | 4.228% | ~8.5% |
| 2023-24 | 8.05% | 4.228% | ~9.0% |
| 2024-25 | 9.08% | 4.228% | ~10.1% |
| 2025-26 | 8.94% | 4.228% | ~10.0% |
| 2026-27 | 9.07% | 4.228%* | ~10.1% |
*Fee shown for loans first disbursed on or after Oct 1, 2025 and before Oct 1, 2026; the Education Department resets the fee each October 1, and it has held at 4.228% since 2022. APRs computed on the 10-year standard plan.
| Option | Typical Rate | Upfront Fee | Who Owes It | Watch Out For |
|---|---|---|---|---|
| Parent PLUS (federal) | 9.07% fixed (2026-27) | 4.228% | Parent only | True APR ~10.1%; no transfer; credit check is adverse-history only |
| Private parent loan | ~6%–14% (credit-based) | 0%– 5% | Parent (or co-signed) | Rate depends heavily on credit; fewer deferment options |
| Private loan to student | ~6%–14% (credit-based) | 0%–5% | Student (+ cosigner) | Cosigner usually stays on; compare total cost, not monthly |
| Home equity (HELOC) | ~7%–10% variable | 0%–1% | Parent; house is collateral | Variable rates; converts unsecured risk into your home |
| Refinance later | ~6%–10% fixed | 0% | Whoever qualifies | Loses federal protections (rare on PLUS anyway) |
Approximate 2025-26 market ranges for well-qualified borrowers; private offers vary widely with credit and term. A PLUS refinance into the student's name with a private lender is the only practical "transfer."
Parent PLUS is the federal loan parents take for a dependent undergraduate, up to the full cost of attendance minus other aid. Two numbers define it: a fixed rate set every July 1, and an origination fee withheld from each disbursement. Most calculators show the payment. This one also shows what the fee does to the loan's real cost.
Payment uses standard amortization: P × r ÷ (1 − (1+r)^−n), with r the monthly rate and n the payment count. The fee is amount × 4.228%, and net disbursement is the difference. The true APR solves for the rate that makes the net-disbursed principal produce the same payment stream — you received $28,731.60 but pay back as if you'd borrowed $30,000, so the effective rate lands above the sticker. That's not marketing math; it's the same APR disclosure logic the Truth in Lending Act forces on every other loan type.
Enter the amount you're actually requesting on the PLUS application (the school certifies it against cost of attendance). Leave the rate and fee at the 2026-27 defaults unless you're pricing a different year. The defer checkbox estimates interest that accrues while your student is enrolled at least half-time plus the six-month grace — 54 months at 9.07% on the full borrowed amount, since interest accrues on principal even though the fee was withheld — so you can see the deferment bill before choosing it.
$30,000 requested for the 2026-27 year. The fee takes $1,268.40 off the top; the school gets $28,731.60. Repayment is based on the full $30,000 at 9.07%: $381.16 a month for 120 months, $45,739.77 total, $15,739.77 of it interest. Now the reveal: solving for the rate on the money you actually received gives 10.093%, call it 10.1% APR. The fee quietly costs more than a full rate point.
Stretch the same loan to the 25-year extended plan and the payment falls to $253.20 — but the total climbs to $75,959.56, more than 2.5 times what was borrowed. Defer for 4.5 years while your student finishes and roughly $12,200 of interest builds before the first payment. The cheaper path, when the family qualifies: borrow less, pay some semesters from cash flow, or price a private loan and a later refinance with the student loan refinance calculator — at 0% fee, a private 9.07% loan would cost $16.12 less per month, about $1,934 over the decade.
9.07% fixed for loans first disbursed July 1, 2026 through June 30, 2027. Recent years: 8.05% in 2023-24, 9.08% in 2024-25, 8.94% in 2025-26. The rate is set each July 1 from the May high-yield 10-year Treasury note plus a fixed add-on, and it never changes for the life of the loan.
4.228% of the loan amount, deducted from each disbursement, for loans first disbursed on or after October 1, 2025 and before October 1, 2026. On a $30,000 loan that's $1,268.40 taken off the top: the school receives $28,731.60 but you repay $30,000 plus interest.
Because you repay the gross amount but receive the net, the effective APR runs about a full percentage point above the stated rate. A 9.07% loan with the 4.228% fee on a 10-year standard repayment works out to roughly a 10.1% APR. Longer repayment stretches the fee's effect over more years, lowering its APR impact but raising total interest.
Up to the full cost of attendance minus all other financial aid received — there's no fixed dollar cap. That makes PLUS the gap-filler of last resort, and also its biggest risk: it's easy to borrow more than retirement math can support. Approval is a credit check for adverse history only, not an affordability check.
60 days after the final disbursement, unless you request deferment while the student is enrolled at least half-time, plus six months after they drop below half-time. Interest accrues during any deferment, so deferring 4.5 years on a $30,000 loan at 9.07% adds roughly $12,200 to the balance before the first payment.
Not through the federal program — the loan stays in the parent's name until it's paid, refinanced, or discharged (federal PLUS loans are discharged if the borrower or the student dies, though they're famously hard to discharge in bankruptcy). The practical transfer is a private refinance: several lenders will refinance a PLUS loan into the student's name if the student qualifies on their own credit and income. The federal double-consolidation path to income-driven repayment closed for new consolidations on July 1, 2025.
Estimates use published 2026-27 federal rates and fees; your loan disclosure governs. This tool isn't financial aid or investment advice — talk to the school's financial aid office and compare offers before signing.