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 find the monthly payment for both the standard term you enter and a 25-year extended term. Total interest is the sum of payments minus principal. The chart plots the remaining balance for each plan so you can see how much faster the standard plan retires the debt.
2026-27 Parent PLUS Rules You Should Know
- Fixed rate: 9.07% for loans disbursed July 1, 2026 - July 1, 2027 (set by federal law, not credit score).
- Origination fee: 4.228% deducted before funds reach the school; you repay the full borrowed amount including the fee.
- New-borrower caps: Parents with no prior federal loan disbursed before July 1, 2026 may borrow only up to $20,000 per student per year and $65,000 lifetime. Parents who already had a loan before that date may keep borrowing up to the full cost of attendance under the legacy rule.
- Repayment: New PLUS loans (disbursed on or after July 1, 2026) are limited to the fixed Standard Repayment Plan; income-driven repayment is no longer available for them.
- Parent responsibility: The loan is entirely the parent's obligation and cannot be transferred to the student.
What Should You Do?
Borrow the minimum needed, because every dollar accrues interest at 9.07%. Paying interest while the student is in school avoids capitalization and lowers the total. Run the retirement test: if the standard payment would force you to cut 401(k) contributions, the loan is likely too large. Compare the standard and extended plans here, then confirm the exact figures with your servicer 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?
Yes, for loans disbursed on or after July 1, 2026, the annual cap is $20,000 per dependent student and the lifetime cap is $65,000 — unless the parent qualified under the legacy transition rule.
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.