Parent PLUS Loan Calculator (2026-27 Rates)
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How It Works
The calculator applies the statutory 4.228% origination fee to your borrowed amount, so the student receives less than you borrow. It then uses the standard amortization formula — payment = balance x r / (1 - (1+r)^-n), with r the monthly rate — to show the payment for the term you enter and an illustrative 25-year payoff timeline. Total interest is the sum of payments minus principal. The chart plots the remaining balance in both scenarios. The 25-year timeline is for cost comparison only and does not establish repayment-plan eligibility.
2026-27 Parent PLUS Rules You Should Know
- Fixed rate: 9.07% for loans first disbursed from July 1, 2026 through June 30, 2027 (set by federal law, not credit score).
- Origination fee: 4.228% is deducted from each disbursement; you repay the full gross borrowed amount plus interest.
- New caps: For academic years beginning on or after July 1, 2026, parents who do not qualify for the limited exception may borrow up to $20,000 per dependent student each year and $65,000 over that student's undergraduate study. Eligible limited-exception parents can remain under the prior cost-of-attendance-minus-aid limit; confirm eligibility with Federal Student Aid.
- Repayment: Direct Loans disbursed on or after July 1, 2026 are not eligible for the Extended Repayment Plan. The 25-year result above is a payment-cost illustration only; confirm your actual plan eligibility with your servicer.
- Parent responsibility: The loan is entirely the parent's obligation and cannot be transferred to the student.
What Should You Do?
Borrow only the amount your funding plan requires, because interest accrues from disbursement. Paying accrued interest while the student is in school can reduce later capitalization. Compare the 10-year and illustrative 25-year payment costs here, then use Federal Student Aid and your servicer to confirm your repayment-plan eligibility and exact figures before signing.
Frequently Asked Questions
Why does the student receive less than I borrow?
The 4.228% origination fee is taken off the top before disbursement. On a $40,000 loan that is about $1,686 withheld, so roughly $38,314 reaches the school and the student.
Are new borrowers really capped at $20,000 a year?
For academic years beginning on or after July 1, 2026, parents who do not qualify for the federal limited exception face a $20,000 annual cap per dependent student and a $65,000 aggregate cap over that student's undergraduate study. The limited exception has specific enrollment and prior-borrowing conditions, so verify eligibility with Federal Student Aid.
Can my child take over the loan?
No. A Parent PLUS loan is the parent's legal and financial responsibility. A student can refinance it into their own private loan later, but that moves it out of federal protections.
Is the interest tax deductible?
Parent PLUS interest may be deductible up to $2,500 per year, subject to income limits (IRS Pub. 970). This calculator does not model the tax effect.
What if I cannot make the payments?
Options include deferment, forbearance, and — for older loans — income-contingent repayment. New PLUS loans from July 1, 2026 no longer qualify for income-driven plans.