The Federal Parent PLUS loan is the acronym for the Parent Loan for Undergraduate Students, a type of loan offered by the US Department of Education for parents who want to borrow funds to pay the cost of attendance for a dependent student. Parents of dependent undergraduates can borrow up to the cost of attendance minus all other financial aid. The interest rate on Federal Direct Loans is a fixed rate set annually based on 10-year Treasury plus 4.6%. Federal law created caps on these annual rates at 10.5%. The current PLUS loan rate is 7.02% with a 4.01% origination fee that is deducted from the proceeds sent to the school. This means that if borrowing $1,000 to pay a tuition bill, the borrower will only receive $959, requiring the family to make up the difference or borrow a higher amount. At Pay4Education, we calculate the higher borrowing amount needed to pay $1,000 to the school.