Federal Direct PLUS Loan vs Private Loan

The Federal Direct PLUS Loan is offered by the Department of Education to parents of undergraduate students and to graduate/professional students. A Direct PLUS Loan is commonly referred to as a parent PLUS loan when made to a parent, and as a grad PLUS loan when made to a graduate student. (Undergraduate students are not eligible to borrow the PLUS loan.)

Private loans are offered by private organizations such banks, credit unions, and state-based or state-affiliated organizations. Private loan options are available for both student and parent borrowers. Students typically will need a cosigner to borrow a private student loan.

The table below highlights some of the differences between the two loan programs. Feel free to contact the Office of Student Financial Services for additional information.

Terms	Federal Direct PLUS Loan	Private Loan
Interest Rate	Fixed at 8.05% for loans first disbursed on or after July 1, 2023 and before July 1, 2024.	Variable or fixed rate. The rate is provided after an application has been submitted.
Fees	4.228% for loans disbursed on or after 10/1/2020 and before 10/1/2023.	Typically zero fees. Check with lender.
Loan Limits	Up to cost of attendance minus financial aid awarded.	Amount is determined by lender; maximum is up to cost of attendance minus financial aid awarded.
Application Process	Apply each year at StudentAid.gov. New borrowers also must complete a PLUS Master Promissory Note (MPN).	Apply each year through lender's website. Xavier uses FastChoice to provide a lender list online.
Credit Requirements	Credit check is required.	Applicants and/or cosigners must meet minimum income and debt-to-income ratio requirements.
Repayment	Repayment begins 60 days after the loan has been fully disbursed. Repayment may be postponed until after student graduates.	Typical repayment begins after student graduates unless other option chosen.
Additional Requirements	Student must have valid a FAFSA on file.	None unless notified by lender.