Navigating the world of student loans can be daunting, especially for parents. If you're considering taking out a Parent PLUS loan to help cover your child's college expenses, it's important to understand the terms and conditions of this federal loan program. This comprehensive guide will walk you through everything you need to know about Parent PLUS loans, from eligibility requirements to repayment options.
The Parent PLUS loan program is designed to help parents cover the cost of their child's undergraduate or graduate degree. Unlike other federal student loans, Parent PLUS loans are not based on financial need. This means that you can borrow the full cost of your child's education, minus any other financial aid they receive. However, you must pass a credit check to qualify for a Parent PLUS loan.
Now that you have a basic understanding of Parent PLUS loans, let's take a closer look at the eligibility requirements, application process, and repayment options.
studentaid.gov parent plus loan
Parent PLUS loans are federal loans for parents of undergraduate and graduate students.
- Borrow up to full cost of education
- No credit check required
- Fixed interest rate
- Repayment begins 60 days after final disbursement
- Multiple repayment options
- Loan forgiveness available
- Apply online at StudentAid.gov
- Must pass a credit check
- Co-signer may be required
- Repayment begins after grace period ends
To learn more about Parent PLUS loans, visit the StudentAid.gov website or contact your loan servicer.
Borrow up to full cost of education
One of the key features of Parent PLUS loans is that you can borrow up to the full cost of your child's education, minus any other financial aid they receive. This means that you can use a Parent PLUS loan to cover the cost of tuition and fees, room and board, books and supplies, and other qualified expenses.
- Covers all qualified expenses:
Parent PLUS loans can be used to cover all qualified expenses associated with your child's education, including tuition and fees, room and board, books and supplies, and other costs.
- Minus other financial aid:
The amount you can borrow is reduced by any other financial aid your child receives, such as scholarships, grants, and federal student loans.
- No aggregate limit:
Unlike other federal student loans, Parent PLUS loans do not have an aggregate limit. This means that you can borrow up to the full cost of your child's education each year, regardless of how much you have borrowed in previous years.
- Multiple children:
If you have multiple children attending college at the same time, you can take out a separate Parent PLUS loan for each child.
To determine how much you can borrow, you will need to contact the financial aid office at your child's school. They will be able to provide you with a cost of attendance budget, which will show you the total cost of your child's education for the year.
No credit check required
Unlike most other loans, Parent PLUS loans do not require a credit check. This means that you can qualify for a Parent PLUS loan even if you have bad credit or no credit history at all. However, you must still meet other eligibility requirements, such as being a U.S. citizen or permanent resident and having a child who is enrolled at least half-time in a degree program at an eligible school.
The lack of a credit check makes Parent PLUS loans a good option for parents who have been turned down for other types of loans. It also makes it easier for parents to borrow money to help their children pay for college, regardless of their own financial situation.
However, it is important to note that Parent PLUS loans are not without risks. If you default on your loan, you could damage your credit score and face other financial consequences. Therefore, it is important to carefully consider your financial situation before taking out a Parent PLUS loan.
If you are considering a Parent PLUS loan, you should contact your loan servicer to learn more about the terms and conditions of the loan. You should also make sure that you understand the repayment options available to you.
To apply for a Parent PLUS loan, you will need to complete the Free Application for Federal Student Aid (FAFSA). You can also apply online at StudentAid.gov.
Fixed interest rate
Parent PLUS loans have a fixed interest rate, which means that the interest rate will not change over the life of the loan. The current interest rate for Parent PLUS loans is 7.54%.
The fixed interest rate is a benefit because it provides you with certainty about how much you will pay each month. This can make it easier to budget for your loan payments.
However, it is important to note that the interest rate for Parent PLUS loans is higher than the interest rate for other federal student loans, such as Stafford loans. This is because Parent PLUS loans are not subsidized, which means that the government does not pay the interest on the loan while the borrower is in school.
If you are considering a Parent PLUS loan, you should compare the interest rate to the interest rates on other loans that you may be eligible for. You should also consider your financial situation and make sure that you can afford the monthly loan payments.
To apply for a Parent PLUS loan, you will need to complete the Free Application for Federal Student Aid (FAFSA). You can also apply online at StudentAid.gov.
Repayment begins 60 days after final disbursement
Repayment of your Parent PLUS loan begins 60 days after the final disbursement of the loan. This means that you will have a grace period of 60 days before you have to start making loan payments.
- Grace period:
You will have a grace period of 60 days after the final disbursement of your loan before you have to start making loan payments.
- Monthly payments:
You will make monthly loan payments until the loan is paid off. The amount of your monthly payment will depend on the amount of money you borrowed and the repayment plan you choose.
- Multiple loans:
If you have multiple Parent PLUS loans, you can consolidate them into a single loan. This will make it easier to manage your loan payments.
- Deferment and forbearance:
You may be able to defer or forbear your loan payments if you experience financial hardship. Deferment allows you to temporarily postpone your loan payments, while forbearance allows you to temporarily reduce or suspend your loan payments.
It is important to make your loan payments on time and in full each month. If you miss a payment, you could damage your credit score and face other financial consequences.
Multiple repayment options
There are multiple repayment options available for Parent PLUS loans. This allows you to choose a repayment plan that fits your budget and financial situation.
- Standard repayment plan:
This is the most common repayment plan. Under this plan, you will make fixed monthly payments for 10 years.
- Graduated repayment plan:
Under this plan, your monthly payments will start out lower and gradually increase over time. This plan may be a good option if you have a limited budget but expect your income to increase in the future.
- Extended repayment plan:
This plan allows you to extend the repayment period to up to 25 years. This will lower your monthly payments, but you will pay more interest over the life of the loan.
- Income-driven repayment plan:
These plans base your monthly payments on your income and family size. This can be a good option if you have a low income or a large family.
You can learn more about the different repayment plans available for Parent PLUS loans at StudentAid.gov.
Loan forgiveness available
There are several loan forgiveness programs available for Parent PLUS loans. This means that you may be able to have your loan forgiven after a certain number of years of service or under certain other circumstances.
- Public Service Loan Forgiveness:
If you work full-time for a public service organization, you may be eligible for loan forgiveness after 120 qualifying payments.
- Teacher Loan Forgiveness:
If you teach full-time for five consecutive years in a low-income school or educational service agency, you may be eligible for loan forgiveness up to $17,500.
- Perkins Loan Cancellation:
If you are a teacher, librarian, or other public service worker, you may be eligible for loan cancellation after five years of service.
- Closed School Discharge:
If the school that your child attended closes while your child is enrolled, you may be eligible for a closed school discharge of your Parent PLUS loan.
To learn more about loan forgiveness programs for Parent PLUS loans, visit StudentAid.gov.