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Important: Federal student loan interest rates are now fixed for the life of the loan (set annually every July 1). 

The Federal Direct Stafford Loan

This is the primary loan for students. It is generally the "cheapest" federal option.

  • Borrower: The student (no co-signer or credit check required).
  • 2025–2026 Interest Rate: 6.39% for undergraduates; 7.94% for graduates.
  • Limits: Strictly capped by year (e.g., $5,500–$7,500 for dependent undergrads).
  • Repayment: Eligible for the new Repayment Assistance Plan (RAP), which caps payments at 1%–10% of income.

The Federal Direct Parent PLUS Loan

This is a credit-based loan for parents of dependent undergraduate students.

  • Borrower: The parent (requires a basic "adverse credit history" check).
  • 2025–2026 Interest Rate: 8.94% (the most expensive federal loan).
  • New 2026 Limits: For loans disbursed on or after July 1, 2026, Parent PLUS loans are capped at $20,000 per year (with a $65,000 lifetime cap per student). You can no longer borrow the "full cost of education" if it exceeds these new limits.
  • Repayment: NOT eligible for the new RAP income-driven plan. Parents are generally limited to the Standard Repayment Plan (10–25 years).

Comparison Summary

Feature Stafford (Student) PLUS (Parent)
Interest Rate 6.39% 8.94%
Credit Check? No Yes
Max Amount Up to $12,500/year $20,000/year*
Income-Driven Pay? Yes (RAP) No


*Legacy Provision: If you borrowed a Parent PLUS loan before July 1, 2026, you may be eligible to continue borrowing up to the full cost of attendance until 2029. Check with your financial aid office for details.