Like many students and families, you may find that supplemental loans are an important resource for financing college. Federal Direct PLUS Loans and private education loans are two available options for families who need additional funds.

These loans are not included in the U-M financial aid package; you must apply for them separately:

  • Direct PLUS Loans are part of the federal Direct Loan Program and are for parents of dependent undergraduates and some eligible graduate/professional students. The loans have favorable loan terms and are backed by the federal government, which has a record of good service. Several types of repayment plans are offered.
  • Private student loans are offered through a variety of banks and other lenders and are available to all students who qualify. The best rates are offered to borrowers who have good credit and/or who have a cosigner with good credit. Note that the majority of lenders require a minimum of half-time enrollment at the point of disbursement of the loan.

Supplemental loans may be of interest if you:

  • have little or no eligibility for need-based financial aid programs
  • need additional resources beyond your financial aid in order to pay college costs
  • are classified as a nonresident and need additional resources to fill the gap between need-based financial aid and college costs

Comparing the Terms of Plus and Private Loans

When students and parents are looking for a supplemental loan, we encourage them to compare private loan and PLUS rates and terms, including:

  • Interest rates
  • Borrowing limits or caps
  • Credit check conditions
  • Deferment and forbearance options
  • Repayment plans

How Much To Borrow

Your supplemental borrowing eligibility is limited by the student's total unmet educational expenses, loan program's borrowing limits (if any), and the borrower's ability to be approved. For example, Parent PLUS loans cannot exceed $20,000 per year beginning 2026-2027 in addition to lifetime borrowing limits, while a private education loan may be borrowed up to any unmet needs to meet the student's Cost of Attendance. It is important to have a borrowing plan.

Remember, borrow only what you absolutely need: What you borrow today must be paid back later (with interest). You determine how much or how little to borrow (up to the maximum allowed). For more information on repaying your loans (including a loan repayment chart), see Repaying Your Student Loans or contact the Office of Financial Aid.