A Parent PLUS Loan is a federal student loan that is available to parents and guardians of dependent undergraduate students. PLUS Loans help pay for your child’s education after subtracting any other financial aid they receive.
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What is a Parent PLUS Loan?
A Parent PLUS Loan is a federal student loan borrowed by the parent of a dependent student to help pay for the student’s education. PLUS Loans can be used to cover any education-related expenses, including tuition and fees, room and board, books and supplies, and other miscellaneous expenses.
Parents who borrow PLUS Loans are responsible for repaying the entire loan, plus any interest that accrues on the loan. PLUS Loans also come with a 4.248% origination fee, which is deducted from the loan proceeds when the loan is disbursed.
How to Apply for a Parent PLUS Loan
The first step is to complete the Free Application for Federal Student Aid (FAFSA®) form. You and your child will need to provide information about your household finances, including your income and assets.
Next, you’ll need to sign in to StudentLoans.gov with your FSA ID. If you don’t have an FSA ID, you can create one when you sign in. Once you’ve logged in, select “Apply for a PLUS Loan.”
You’ll then need to complete the Parent PLUS Loan Application. You’ll be asked to provide information about yourself, your child, and your finances. You’ll also need to sign the application with your FSA ID.
If you’re approved for a Parent PLUS Loan, you’ll be asked to complete a Master Promissory Note (MPN). An MPN is a legal document in which you promise to repay your loan and any accrued interest and fees. You can complete an MPN online at StudentLoans.gov by signing in with your FSA ID or by printing and completing a paper MPN.
After you’ve completed the MPN, your child will need to complete entrance counseling at StudentLoans.gov. Entrance counseling is required for all first-time borrowers of federal student loans and helps borrowers understand their responsibility for repaying their loans.
Parent PLUS Loan Eligibility
To be eligible for a Parent PLUS Loan, you must:
-Be the biological or adoptive parent, or in some cases, the stepparent, of a dependent undergraduate student enrolled at least half-time at a participating school
-Not have an adverse credit history (a credit check will be performed)
-Meet other eligibility requirements of the federal student aid programs
Parent PLUS Loan Terms and Conditions
The Parent PLUS Loan is a federal student loan available to parents and legal guardians of dependent undergraduate students. PLUS Loans can help pay for education expenses not covered by other financial aid such as scholarships and federal student loans.
To receive a Parent PLUS Loan, the student must complete a Free Application for Federal Student Aid (FAFSA®) form. If the student is eligible for a Parent PLUS Loan, the amount will be listed on their Student Aid Report (SAR).
Parents or guardians who wish to apply for a Parent PLUS Loan must complete a Master Promissory Note (MPN) and PLUS Loan Application. The MPN is a legally binding document that explains the terms and conditions of the loan. By signing the MPN, the borrower agrees to repay the loan in full, with interest, even if their child does not complete their education or is unable to find employment after graduation.
The amount borrowed must be repaid with interest even if the student does not complete their education or is unable to find employment after graduation. Interest accrues on the loan from the time it is first disbursed until it is paid in full. Repayment begins 60 days after the final loan disbursement for each academic year unless the borrower requests a deferment or forbearance.
Parent PLUS Loans are not eligible for income-driven repayment plans or public service loan forgiveness.
Parent PLUS Loan Repayment
PLUS loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school. PLUS loans can help pay for education expenses up to the cost of attendance minus any other financial aid the student may receive.
The U.S. Department of Education (ED) makes Direct PLUS Loans to eligible borrowers through schools participating in the Direct Loan Program. A Direct PLUS Loan is sometimes called a “Parent PLUS Loan” when made to a parent, and a “Graduate PLUS Loan” when made to a graduate or professional student. All Direct PLUS Loans have the same terms and conditions, regardless of whether they are made to parents or graduate or professional students.
Parent PLUS Loan Forgiveness
There are a few ways to get your Parent PLUS Loan forgiven. The first way is through loan consolidation. You can consolidate your Parent PLUS Loan into a Direct Consolidation Loan, and then you may be eligible for the Public Service Loan Forgiveness program. If you’re not employed by a qualifying public service organization, you can still get your loan forgiven if you make 25 years of consecutive, on-time monthly payments.
Another way to get your Parent PLUS Loan forgiven is through death or disability discharge. If you die or become permanently disabled, your loan will be discharged and you (or your cosigner) won’t have to make any more payments on the loan.
One final way to get your Parent PLUS Loan forgiven is through school closure discharge. If your school closes while you’re enrolled, or if it closes within 120 days of you leaving school, you may be eligible for a discharge of your loan.