Parent Plus

The Parent Plus loan is an unsubsidized federal loan for the parents of dependent students that are attending college. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Here are some important facts about the plus loan.

• It offers a fixed rate of 7.9%
• Loan is in the parents name only
• Must be used for higher education expenses for the dependent child of the borrower
• The student must have a FAFSA form filed
• Must complete a Parent Plus Loan Master Promissory Note with www.studentloans.gov
• Loan normally begins repayment immediately

The Parent Plus loan credit check:

To be eligible for a Parent Plus Loan, you must not have an adverse credit history. If you are found to have an adverse credit history, you may still borrow a Parent Plus Loan if you get an endorser who does not have an adverse credit history. An endorser works like a co-signer where someone else agrees to repay loan if you do not repay the loan.

If a Parent Plus loan were credit denied, the student becomes eligible for an additional unsubsidized Stafford loan. If the student is a freshman or sophmore, the amount of the unsubsidized loan is $4,000. If the student is a junior or senior the amount is $5,000.

– The Parent plus loan is a popular choice for many of the parents of college bound students. With a fixed rate, there is a predictable repayment schedule. Payments are due each month after the loan has been disbursed. If the payments work into your budget then the Parent Plus loan might be the right choice.
If you have more than one child looking to attend college simultaneously then you will need to consider if this loan can be used to finance each child’s education. That is because of the amount of outstanding debt that will have to be weighed on the parent’s credit and the monthly payment that is due.
Also parents that cannot get credit approved for a parent plus loan are able to help their child to secure an additional Stafford loan as mentioned earlier. This is an effective strategy if the child’s balance is low enough to be covered by the additional loan.