A Parent PLUS Loan is a federal student loan that is available to the parents of dependent undergraduate students. PLUS Loans can help pay for education expenses up to the cost of attendance minus any other financial aid the student may receive.
Checkout this video:
What is a Parent Plus Loan?
A Parent PLUS Loan is a federal student loan that is available to the parents of dependent undergraduate students. Parents can borrow up to the full cost of their child’s education minus any other financial aid that the child receives.
The Parent PLUS Loan has a fixed interest rate that is set each year on July 1st. For loans disbursed between July 1, 2018 and June 30, 2019, the interest rate is 7.595%.
Repayment of a Parent PLUS Loan begins 60 days after the final loan disbursement for the school year. Parents have the option to defer repayment while their child is in school, but this will result in accrued interest being added to the principal balance of the loan.
How to Apply for a Parent Plus Loan
To apply for a Parent Plus Loan, the first step is to complete a Free Application for Federal Student Aid (FAFSA).Parent Plus Loans are available to creditworthy parents of dependent undergraduate students who are enrolled at least half-time in an eligible program at a participating school.
Once you have completed the FAFSA, the next step is to contact the financial aid office at the school your child is attending and request a PLUS Loan Application. The school will then provide you with information on how to complete the application process, which may include completing an online Master Promissory Note.
When you have completed the PLUS Loan Application and Master Promissory Note, your loan will be processed and the funds will be disbursed to your child’s school. The school will then apply the funds to your child’s account to pay for tuition, fees, room and board, and other eligible expenses.
How to Get Approved for a Parent Plus Loan
The Parent Plus Loan is a federal student loan that is available to parents of dependent undergraduate students. Parent Plus Loans can be used to help pay for education expenses up to the cost of attendance. To be eligible for a Parent Plus Loan, parents must complete the Free Application for Federal Student Aid (FAFSA) and be creditworthy.
If you are approved for a Parent Plus Loan, you will be required to complete a Master Promissory Note (MPN). The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education.
Once you have completed the MPN, your loan will be disbursed in multiple payments directly to your child’s school. Your child’s school will then apply the funds to their tuition and fees, room and board, books and supplies, and other education-related expenses.
If you have any questions about Parent Plus Loans or need help getting started, please contact our office at (800) XXX-XXXX.
How to Repay a Parent Plus Loan
Parent PLUS loans are federal student loans that are available to the parents of dependent undergraduate students. The maximum loan amount is the cost of attendance minus any other financial aid that the student is receiving. Parent PLUS loans have a fixed interest rate and can be deferred while the student is in school.
repayment on Parent PLUS loans begins 60 days after the loan is fully disbursed. Parents have the option to make interest-only payments during this grace period. If they choose not to do so, the interest will be capitalized (added to the principal balance) when repayment begins.
There are several repayment plans available for Parent PLUS loans, including the Standard Repayment Plan, which has a 10-year repayment term, and the Extended Repayment Plan, which has a 25-year repayment term. Parents also have the option to enroll in an income-based repayment plan, which will lower their monthly payment if they have a high debt-to-income ratio.
Finally, parents can consolidate their Parent PLUS loans into a Direct Consolidation Loan, which will give them a new interest rate and repayment term. This can be beneficial if parents are struggling to make their monthly payments or if they want to switch to an income-based repayment plan.