Plus loan denial = More Stafford funding

July 9th, 2010 by Ken No Comments »

The hot summer months before the fall mean one thing for parents of college students: A tution bill is due. 2010 is a special year because of all the economic challenges that families face. Parents need to know all the options to get the bills paid.

The Parent Plus loan is a federal student loan in the parent’s name. It is a popular choice for many families to help cover tuition balances. But with credit woes abound, some parents cannot get credit approved for Parent Plus.

There is a silver lining for Parent Plus loan credit denials. The student becomes eligible for an increase in Stafford loan eligibility if their parent is credit denied for the Plus loan. If the student is a Freshman or Sophmore they receive an additional $4000 unsubsidized Stafford loan. If the student is a Junior or Senior, they can receive an additional $5,000 unsubsidized Stafford loan.

All plus loans are processed through the Federal Direct Loan program. By completing the application electronically you can get a credit response very quickly. Many parents apply for the Plus loan expecting to get denied just to make sure their child gets access to additional Stafford loan funding. Find out by applying for a Federal Parent Plus loan through Direct Loans. Forward a copy of the credit denial to your school’s financial aid office to make sure you get the additional stafford loan.

Ken’s Tip – Whenever you apply for a Parent Plus loan one of two things happens; either you get approved or denied. Sometimes a parent may believe they will get credit denied for the loan only to find out that the loan was approved. If the plus loan is unexpectedly approved then the student cannot receive the additional $4,000 or $5,000 Stafford loan. If you don’t want the plus loan after it is approved just cancel it without obligation.

Tags: college students, credit denial, denials, direct loans, economic challenges, federal direct loan, federal direct loan program, federal parent plus loan, federal student loan, financial aid office, freshman, hot summer, loan credit, loan denial, loan eligibility, parent plus loan, silver lining, tution, unsubsidized stafford loan, woes

This entry was posted on Friday, July 9th, 2010 at 7:52 pm and is filed under Parent. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.