Are you a parent of a college student struggling to cover the costs of tuition, fees, and other expenses? If so, you may want to consider applying for a Parent PLUS Loan. This federal loan program allows parents to borrow money to help their children pay for college. In this article, we will provide an overview of the Parent PLUS Loan program, including eligibility requirements, how to apply, and repayment options.
Parent PLUS Loans are available to parents of dependent students who are enrolled at least half-time in a degree or certificate program at an eligible college or university. The maximum amount that a parent can borrow each year is the cost of attendance minus any other financial aid that the student is receiving. To apply for a Parent PLUS Loan, you will need to complete the Free Application for Federal Student Aid (FAFSA). You will also need to provide documentation of your income and assets. Once you have applied, the Department of Education will make a decision on your loan application based on your credit history and other factors.
If you are approved for a Parent PLUS Loan, you will have several repayment options. You can choose to make payments over a period of 10 to 25 years. You can also choose to make interest-only payments while your child is in school. Once your child graduates, you will need to begin making full payments on the loan.
Parents PLUS Loan
Federal loan for parents of college students.
- Available to parents of dependent students.
- Maximum loan amount is cost of attendance minus other aid.
- Repayment begins after student graduates or leaves school.
- Repayment options include standard, graduated, and extended.
- Interest rates are fixed and set by the government.
Parents PLUS Loans can be a helpful way to cover the costs of college for your child. However, it is important to understand the terms and conditions of the loan before you apply.
Available to parents of dependent students.
To be eligible for a Parent PLUS Loan, you must be the parent of a dependent student who is enrolled at least half-time in a degree or certificate program at an eligible college or university. Your child must also be a U.S. citizen or eligible non-citizen.
A dependent student is defined as a student who is:
- Under the age of 24.
- Not married.
- Not a veteran.
- Not a ward of the court.
- Not self-supporting.
If your child meets these requirements, you may be eligible for a Parent PLUS Loan. However, you will need to pass a credit check and demonstrate that you have the ability to repay the loan.
The maximum amount that you can borrow each year is the cost of attendance minus any other financial aid that your child is receiving. The cost of attendance includes tuition and fees, room and board, books and supplies, and other expenses.
If you are approved for a Parent PLUS Loan, you will have several repayment options. You can choose to make payments over a period of 10 to 25 years. You can also choose to make interest-only payments while your child is in school. Once your child graduates, you will need to begin making full payments on the loan.
Parent PLUS Loans can be a helpful way to cover the costs of college for your child. However, it is important to understand the terms and conditions of the loan before you apply.
Maximum loan amount is cost of attendance minus other aid.
The maximum amount that you can borrow each year with a Parent PLUS Loan is the cost of attendance minus any other financial aid that your child is receiving. The cost of attendance includes the following:
- Tuition and fees
- Room and board
- Books and supplies
- Transportation
- Other expenses, such as child care and disability services
To determine the cost of attendance, the college or university will consider your child's academic program, year of study, and other factors. Once the cost of attendance has been determined, the college or university will subtract any other financial aid that your child is receiving, such as scholarships, grants, and work-study. The remaining amount is the maximum amount that you can borrow with a Parent PLUS Loan.
For example, let's say that the cost of attendance for your child's college is $20,000 per year. Your child is receiving a scholarship of $5,000 per year and a grant of $2,000 per year. The remaining cost of attendance is $13,000 per year. This is the maximum amount that you can borrow with a Parent PLUS Loan.
It is important to note that the maximum loan amount may change each year. This is because the cost of attendance and your child's financial aid may change from year to year.
If you are considering applying for a Parent PLUS Loan, it is important to carefully review the terms and conditions of the loan. You should also make sure that you understand the maximum loan amount that you can borrow.
Repayment begins after student graduates or leaves school.
Repayment of a Parent PLUS Loan begins after your child graduates, leaves school, or drops below half-time enrollment. You will have a six-month grace period before you are required to begin making payments.
- Standard repayment plan: This is the most common repayment plan. Under this plan, you will make fixed monthly payments over a period of 10 years.
- Graduated repayment plan: Under this plan, your monthly payments will start out low and then 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 may be a good option if you have a low income or high debt.
- Income-driven repayment plan: Under this plan, your monthly payments will be based on your income and family size. This may be a good option if you have a low income or high debt.
You can choose the repayment plan that best fits your financial situation. If you are having difficulty making your payments, you may be able to defer or forbear your loan. You may also be able to apply for loan forgiveness.
Repayment options include standard, graduated, and extended.
Once you have taken out a Parent PLUS Loan, you will have several repayment options to choose from. The three most common repayment plans are the standard repayment plan, the graduated repayment plan, and the extended repayment plan.
- Standard repayment plan: Under this plan, you will make fixed monthly payments over a period of 10 years. This is the most common repayment plan and it is the one that most people choose.
- Graduated repayment plan: Under this plan, your monthly payments will start out low and then 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 may be a good option if you have a low income or high debt.
In addition to these three repayment plans, there are also income-driven repayment plans available. Under an income-driven repayment plan, your monthly payments will be based on your income and family size. This may be a good option if you have a low income or high debt.
Interest rates are fixed and set by the government.
The interest rates on Parent PLUS Loans are fixed and set by the government. This 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 interest rate on Parent PLUS Loans is higher than the interest rate on other federal student loans, such as Stafford Loans and Direct PLUS Loans. This is because Parent PLUS Loans are considered to be a higher risk for lenders. Parents who take out Parent PLUS Loans are not eligible for loan forgiveness programs, and they may have difficulty repaying the loan if their child does not complete college.
Despite the higher interest rate, Parent PLUS Loans can be a helpful way to cover the costs of college for your child. If you are considering taking out a Parent PLUS Loan, it is important to compare the interest rate to the interest rates on other loans that you may be eligible for.
You should also consider the repayment options that are available for Parent PLUS Loans. You may be able to choose a repayment plan that fits your budget and allows you to repay the loan over a longer period of time.
If you have any questions about Parent PLUS Loans, you should contact your lender or the U.S. Department of Education.
FAQ
Here are some frequently asked questions about Parent PLUS Loans:
Question 1: What is a Parent PLUS Loan?
Answer 1: A Parent PLUS Loan is a federal loan that allows parents to borrow money to help their children pay for college.
Question 2: Who is eligible for a Parent PLUS Loan?
Answer 2: To be eligible for a Parent PLUS Loan, you must be the parent of a dependent student who is enrolled at least half-time in a degree or certificate program at an eligible college or university.
Question 3: What is the maximum amount that I can borrow with a Parent PLUS Loan?
Answer 3: The maximum amount that you can borrow each year with a Parent PLUS Loan is the cost of attendance minus any other financial aid that your child is receiving.
Question 4: What is the interest rate on Parent PLUS Loans?
Answer 4: The interest rate on Parent PLUS Loans is fixed and set by the government. The current interest rate is 7.54%.
Question 5: What are the repayment options for Parent PLUS Loans?
Answer 5: You can choose from several repayment plans for Parent PLUS Loans, including the standard repayment plan, the graduated repayment plan, and the extended repayment plan. You may also be eligible for an income-driven repayment plan.
Question 6: What happens if I can't repay my Parent PLUS Loan?
Answer 6: If you are having difficulty repaying your Parent PLUS Loan, you may be able to defer or forbear your loan. You may also be able to apply for loan forgiveness.
Question 7: Where can I get more information about Parent PLUS Loans?
Answer 7: You can get more information about Parent PLUS Loans from your lender or the U.S. Department of Education.
Closing Paragraph for FAQ:
If you are considering taking out a Parent PLUS Loan, it is important to carefully review the terms and conditions of the loan. You should also make sure that you understand the repayment options that are available.
Now that you know more about Parent PLUS Loans, you can start planning for how you will pay for your child's college education.
Tips
Here are a few tips for parents who are considering taking out a Parent PLUS Loan:
Tip 1: Compare interest rates.
The interest rate on Parent PLUS Loans is fixed and set by the government. However, you may be able to get a lower interest rate from a private lender.
Tip 2: Choose a repayment plan that fits your budget.
There are several repayment plans available for Parent PLUS Loans. Choose a plan that fits your budget and allows you to repay the loan over a period of time that you can afford.
Tip 3: Make extra payments when you can.
If you have extra money, consider making extra payments on your Parent PLUS Loan. This will help you pay down the loan faster and save money on interest.
Tip 4: Apply for loan forgiveness.
If you work in certain public service jobs, you may be eligible for loan forgiveness on your Parent PLUS Loan. Contact your loan servicer to learn more about loan forgiveness programs.
Closing Paragraph for Tips:
By following these tips, you can save money on your Parent PLUS Loan and make it more manageable.
Taking out a Parent PLUS Loan is a big decision. By carefully considering your options and following these tips, you can make sure that you are making the best decision for your family.
Conclusion
Summary of Main Points:
Parent PLUS Loans can be a helpful way to cover the costs of college for your child. However, it is important to understand the terms and conditions of the loan before you apply.
To be eligible for a Parent PLUS Loan, you must be the parent of a dependent student who is enrolled at least half-time in a degree or certificate program at an eligible college or university.
The maximum amount that you can borrow each year with a Parent PLUS Loan is the cost of attendance minus any other financial aid that your child is receiving.
The interest rate on Parent PLUS Loans is fixed and set by the government. The current interest rate is 7.54%.
There are several repayment options available for Parent PLUS Loans. You can choose a plan that fits your budget and allows you to repay the loan over a period of time that you can afford.
Closing Message:
Taking out a Parent PLUS Loan is a big decision. By carefully considering your options and following the tips in this article, you can make sure that you are making the best decision for your family.
If you have any questions about Parent PLUS Loans, you can contact your lender or the U.S. Department of Education.