A Parent Plus loan is where the parents can take out a loan for their child when they are enrolled in school.
This loan is to help pay for the expenses that is inquired upon a student when they have been enrolled at least half of the time in an eligible program at a college.
Below I will do my best to outline the most important details about this loan.
As always, if you have questions please ask them in the comment section.
Eligibility for A Parent Plus
The parent’s credit history has to be in good standing.
Must be from the United States and a citizen of the United States
A financial need isn’t required to obtain a loan.
The parent is responsible for all interest that occurs on the loan.
A lot of parents are not aware of this form of a loan. It is one that is done by the federal government in hopes to help a student while they are in school. When a parent is able to take out such a loan and meet the requirements listed above it will help their child with a lot of expenses while being in school. Plus, with a parent getting a loan they can usually get one with a fixed rate or a low interest rate.
Also keep in mind that with this kind of loan your child will have to have met certain achievements while in school for instance their grades will need to be at a certain level and not drop down. When applying for the loan you will need to fill out the proper application form and submit any documents that are requested by the financial aid division.
In return the financial aid people will get a hold of the student and let them know about the loan period and the kind of eligibility along with the amount of how much they need. As the parent you will then take that information and decide on how much your child will need when you go to borrow the money.
You also may get a 0.25 percent of a repayment interest rate with credit when you have the payment set up to be automatically taken from your back account. There is also the three percent origination fee and a one percent federal fee. The parent plus loan requires no form of collateral. The interest could possibly be a tax deductible.
Depending on how much your child will need will vary on how much you can borrow. The limit on a yearly basis is also equal to the cost when it comes to the attendance and you have to minus that if there is any other financial assistance involved that you get.
When repaying back the loan from parent plus parents now have two options. They can start paying on it while their child is still in school or they can choose to pay on it once they graduate. Keep in mind though that if you wait till after your child graduates the interest cost may accumulate.
If you have the money to pay it off in full you can also do that because there are no penalties for paying off the loan early. You can’t apply for all four years of school at once with a parent plus loan but you can apply when each term comes up.
There are several places you can go to apply for a parent plus loan but just be careful when you enter each site and always remember to read all the information provided for you. Parent plus is a loan that is made by the federal government.
Anytime that you have questions or any kind of concerns you can contact them by writing them a letter, calling the toll free number that is listed on the site you are at or go to a forum. Some forums will be able to help you with any questions you might have because some parents and their children will have either asked the same question so the answer might already be there for you.
Once you have made the loan you can’t transfer it to your child. If for any reason you decide you do not want the loan you can cancel it but also notify the school that you did. You will not be charged for any sort of payment when you do cancel.