Direct PLUS Loan Credit Counseling: What You Need to Know

 May 28, 2020
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If you have bad credit, you can still secure a direct PLUS loan from the federal government — but you might have to complete 20 to 30 minutes of free PLUS credit counseling.

The counseling is especially important because direct PLUS loans come with the highest interest rate among federal loan options. That hinders repayment for parent PLUS loan borrowers or graduate students taking out PLUS loans.

But counseling could help ease your repayment. Here are four topics to cover:

Why you might need PLUS credit counseling
How to complete PLUS credit counseling
What’s covered in PLUS credit counseling
Why loan counseling is worth your time

Why you might need PLUS credit counseling

If you’ve already applied for a PLUS loan, then you might be familiar with the U.S. Department of Education’s Office of Federal Student Aid website. It allows you to complete entrance counseling, plus other mandatory and optional training upon taking out your loans. This is different from hiring a student loan counselor (for a fee, in most cases) after you or your child has left school.

In the case of PLUS credit counseling, you might be completing it while you wait for your loan application to be approved. More likely, you’ll complete it after having your application denied.

This is because the Education Department only requires that applicants — either postgraduate students or the parents of undergraduate students — complete the counseling if they have an adverse credit history. That’s defined as being at least 90 days’ delinquent on a debt of $2,085 or more.

It’s also defined as having any of the following marks on your credit report (within the past five years):

  • Default determination
  • Discharge of debt in bankruptcy
  • Foreclosure
  • Repossession
  • Tax lien
  • Wage garnishment
  • Write-off of a federal student aid debt

If your PLUS loan application is denied, you would need to either obtain an endorser (or cosigner) or document the unique circumstances of your credit history. Then comes the requirement to take student loan counseling online.

How to complete PLUS credit counseling

You can voluntarily complete PLUS credit counseling at, but you have to finish it within 30 days to fulfill the borrowing requirement.

There are free demos of the all-virtual counseling, but you’ll need an FSA ID (formerly the Federal Student Aid pin) to complete it. If you’re a parent, you’ll need to create your own FSA ID, not use your child’s. You can create one in five minutes or less but might need to wait 24 hours to have your credentials approved.

Also, have the following personal financial information handy:

  • Adjusted gross income
  • Financial aid
  • Living expenses

You will also need to fill out specifics about your living expenses, like:

  • Rent/housing
  • Utilities
  • Groceries
  • Insurance
  • Credit card payments

You’ll have the option of adding more expenses as you see fit. Rough estimates are all that’s required to progress through the loan counseling. But the more data points you can enter into the tool, the better information it will pump out.

Entering your loan, income and expenses information can inform you about your future as a borrower. The advice is one-size-fits-all, but the numbers are yours.

A parent PLUS loan borrower earning $50,000 in adjusted gross income per year while keeping expenses low, in this example, could be presented with this helpful visual:


What’s covered in PLUS credit counseling

The Education Department’s PLUS credit counseling course features two sections.

1. Student loans and affordability

This first section allows you to assess your prospective loan repayment.

Besides taking your loan details, income and expenses to estimate your monthly budget for repayment, you can also plug your information into the Federal Student Aid website’s income-driven repayment plan simulator to see which repayment plan is best for you (and whether you might be eligible for loan forgiveness).

For an even more holistic view of their situation, parent PLUS loan borrowers will be able to include their other federal loans, and postgraduate students will be able to do the same.

2. Avoid delinquency and default

The second section of the loan counseling process focuses on avoiding the undesired scenarios of delinquency and default. You’ll want to pay extra-close attention to the second half of the counseling if your student loan burden could be burdensome, or has already proved to be.

This section covers everything that might keep you from joining the 11.1% of borrowers delinquent on their payments or in default, according to our student loan statistics. These topics include:

  • Deferment and forbearance: How to pause your repayment if you need to
  • Loan forgiveness, cancellation or discharge: Scenarios where you might qualify for relief
  • Resolving disputes: Direction on troubleshooting the borrower-servicer relationship
  • Loan consolidation: Considering the pros and cons of grouping your federal loans

It’s less interactive than the first half of the counseling — you won’t need to input personal information — but just as important to comb through. So be sure to take your time through it even though the website says you might finish everything within 30 minutes.

Why loan counseling is worth your time

If the Department of Education requires you to complete student loan counseling and you don’t get around to it, you won’t be able to qualify for parent PLUS loans or grad PLUS loans. That’s the obvious reason to finish it as soon as you’re asked.

Beyond that, the counseling acts as a quick and easy form of continuing education on student loan debt. It’s divided into two main sections — I completed each in about 15 to 20 minutes. You might be faster if you have all of your information handy.

All in all, student loan counseling is what you make of it. The more information you put into the student aid website’s tools, the better results you may receive. And the more time you spend learning about your loans, the more prepared you’ll be to repay them.

So although you might be required to do PLUS credit counseling, it can also be worthwhile.

Interested in refinancing your Parent PLUS loans?

Here are the top 9 lenders of 2022!
LenderVariable APR 
1.74% – 8.70%1

Visit Splash

1.74% – 7.99%2

Visit Earnest

4.44% – 8.09%3

Visit CommonBond

1.74% – 7.99%4

Visit SoFi

1.89% – 5.90%5

Visit Laurel Road

1.74% – 7.99%6

Visit NaviRefi

1.90% – 5.25%7

Visit Lendkey

1.86% – 6.01%

Visit Elfi


Visit PenFed

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 4, 2022.

2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.

3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. ‍All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Apr 22, 2021 and may increase after consummation.

4 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

5 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.


This information is current as of April 29, 2021. Information and rates are subject to change without notice.

6 Important Disclosures for Navient.

Navient Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 2.99% – 8.24% APR (2.74% – 7.99% APR with Auto Pay discount). Starting variable interest rates are 1.99% APR to 8.24% APR (1.74% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

7 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 11/15/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay.

8 Important Disclosures for PenFed.

PenFed Disclosures

Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.