As it’s name implies, the Parent PLUS loan allows parents of undergraduate students to borrow allows parents to borrow the total cost of undergraduate education including tuition, room and board, supplies, college fees and more, minus any other aid received. Once the loan has been put into the student’s account at the school, repayment begins shortly thereafter, at which time this loan can be consolidated. At a fixed interest rate, the Parent PLUS loan is an easy and cost effective solution to help bridge the gap between Stafford loan funding and the cost of education.
To meet eligibility requirements to receive a Parent PLUS Loan, both the applicant (parent) and student must:
» Be a U.S. citizen, permanent resident, or eligible non-citizen.
» Not owe a refund on a federal education grant
» Not be in default on any education loan.
» Not have adverse credit history – if so, use a co-endorser to receive the loan
Some commonly asked questions about the Parent PLUS Loan:
How much can be borrowed?
The yearly limit on a PLUS Loan is equal to the cost of attendance minus any other financial aid you receive. For example, if the cost of attendance is $6,000 and you (the student) receive $4,000 in other financial aid, the parent could borrow up to, but no more than, $2,000.
Who receives the funds?
The school receives the loan check. In most cases, the loan will be disbursed in at least two installments. The funds will first be applied to tuition, fees, room and board, and other school charges. If any loan funds remain, the parents will receive the amount as a check or in cash, unless they authorize the amount to be released the student or the student’s account at the school. Any remaining loan funds must be used for education expenses.
Whose name is this loan in?
The parent – since it is based on the parent’s credit, it is in their name.
When does repayment begin?
Typically, repayment begins within 60 days after the loan is fully disbursed, or usually after the winter semester funds are deposited into the student’s account at school.
What are the repayment options for a Parent PLUS Loan?
The normal repayment term for this loan is 10 years. Parents may be able to extend repayment by deferring or consolidating these loans. Since parents may take out multiple Parent PLUS loans, for different academic years and for different children, they all may be lumped together into one, final consolidation.
What is the interest rate on a Parent PLUS Loan?
Parent PLUS Loans issued after July 1, 2006 have a fixed interest rate of 8.5%.
How do I apply?
Simple! Visit this website (be sure you are near a printer to successfully complete the application):
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