Students and parents repay the Department. A Direct PLUS Loan enables parents of dependent students to borrow for their child's education. A dependent student is one who does not meet any of the criteria for an independent student. If your child does NOT meet any of these criteria, you may apply for a Direct PLUS Loan for him or her. The interest rate on the Direct PLUS Loan is variable and adjusted each year but will never be higher than 9 percent.
Interest begins to accumulate on the date of the first loan disbursement.
The repayment options available to the PLUS borrower were outlined in the above section. The school is the lender and the loan is made with government funds. The loan is repaid to the school. A Perkins Loan borrower is not charged an origination fee or an insurance premium. Repayment of the Perkins Loan begins nine months after the borrower graduates, leaves school, or drops below half- time status.