State of Connecticut Department of Banking

Parent Loans

What is a "Parent Loan?" | Types of Loans | Repayment Options | Loan Forgiveness/Discharge Options

What is a “Parent Loan?”

A parent loan is a loan that a parent takes out to help assist their student with educational expenses. The parent is the borrower for these loans.

Most parent loans will require a either a credit inquiry or credit application.

What types of Parent Loans are available?
Federal
William D. Ford Federal Direct Parent PLUS Loan (PLUS)

Direct PLUS Loans can help pay for education expenses not covered by other financial aid.  The Department of Education is the lender for Direct PLUS Loans. 

Direct PLUS Loans require a credit inquiry.

Who is eligible to apply?

Biological parents, adoptive parents, or in some cases, the stepparent, of a dependent undergraduate student enrolled at least half-time at an eligible school.

Grandparents (unless they have legally adopted the dependent student) and legal guardians are not eligible to receive PLUS loans, even if they have and/or have had primary responsibility for raising the student.

Additional criteria
  • Parent must not have an adverse credit history
  • Additional criteria can be found on Federal Student Aid
What is the interest rate for PLUS loans?

Loans disbursed on or after July 1, 2024 and before July 1, 2025 have a fixed interest of 9.08%.

Private

Private parent loans are offered by private organizations/lenders such as banks, credit unions, schools, and state-based or state-affiliated organizations. Eligibility criteria and terms and conditions for private parent loans are determined by the lender.  We recommend thoroughly reviewing the criteria and terms and conditions with each lender.

What repayment options are available?
Federal

There are four repayment plans available to Parent PLUS borrowers:

  • Standard Repayment -- Default repayment plan (10 years); payments are fixed
  • Graduated Repayment -- Generally paid off in 10 years; monthly payments start low and increase every 2 years
  • Extended Repayment -- Repayment for up to 25 years; fixed or graduated payments
  • Income-Contingent Repayment – Only available by consolidating PLUS loans into a Direct Consolidation Plan. Repayment for 25 years; 20% of discretionary income.

To learn more about each of these plans, visit the Loan Repayment Plan page.  

Private

Private parent loan repayment options are determined by the lender.  Please contact your lender directly for available options.

What Loan Forgiveness/Discharge options are available for Parent Loans? 
Federal
Public Service Loan Forgiveness (PSLF) 

PSLF is the forgiveness program most used by people to have their loans forgiven. If you are employed by a government or non-profit, the program may forgive the remaining balance after meeting certain requirements.

Qualifying for PSLF

Parent PLUS borrowers may be eligible to apply for PSLF under certain circumstances:

  • PLUS Loan has been consolidated into a Direct Consolidation Loan
  • Be in repayment through the Income-Contingent Repayment Plan (only available after consolidation into a Direct Consolidation Loan)

Additional federal loan forgiveness/discharge options and requirements can be found at Federal Student Aid. 

Private

Private parent loan forgiveness/discharge options are determined by the lender.  Please contact your lender directly for available options.