Stressing over how you can fund your children’s education? Let’s face it. Sending your kids to school comes with an outrageous price. And for many parents, keeping up with these educational costs could be a challenging feat, especially with tons of other household necessities that need to be financed.
If you ever found yourself facing such dilemma, turning to a Parent PLUS Loan can help you get back on your feet and keep the household finances running smoothly. Serving as a federal loan program, the offer works to help parents and guardians cover the cost of student's education.
If you’re interested to know more about this program, you can check out our brief guide below. Here, we have compiled everything you need to know about the Parent PLUS Loans. Read on to see how the loans work and how you can apply.
Parent PLUS Loans – What are They?
Generally, Parents PLUS Loans are federal student loans. However, what sets them apart is that, while the typical student loans go to students, these loans are accredited to parents. This means that it is the latter who goes on debt instead of the former.
Under this type of loans, parents will be allowed to borrow up to the full cost of their child's attendance in school, minus any financial assistance the student received. Funds are to be sent directly to the school of the dependent undergraduate student and refunds for amounts beyond what is owed to the school to be send to the parent.
Similar to other loan offers, the Parent PLUS Loans come in different repayment plans, namely, the Standard Repayment Plan, the Graduated Repayment Plan, and the Extended Repayment Plan.
Under the first type, you’ll be subjected to fixed monthly payments for up to 10 years. Meanwhile, the second one follows a repayment method that starts with lower payments that will increase every two years. Lastly, the Extended Repayment Plan lets you repay your loans over an extended period of up to 25 years.
How to Apply for Parent PLUS Loans?
To apply for a Parent PLUS Loan, you must first satisfy the program’s eligibility requirements. These include being the biological or adoptive parent of a dependent undergraduate student enrolled at least half-time at an eligible school, must not have adverse credit history, and must satisfy the general eligibility requirements for federal student aid (Note: Your child must also meet these criteria).
If you and your child qualify, you can proceed by applying for a Parent PLUS Loan. Generally, application process for the program can vary from school to school. However, in most cases, you’ll be asked to apply online through the StudentLoans.gov.
To start, you must first answer and submit the FAFSA (Free Application for Federal Student Aid) available online. Once done, you can the log in to StudentLoans.gov using your FSA ID. Select the option that says "Request a PLUS Loan" and follow the given instructions.
Loan Fees
- Loan fee: 4.236% (On or after Oct. 1, 2019, and before Oct. 1, 2020)
- Interest rate: 7.08% (for loans disbursed before July 1, 2020)
The Bottom Line
With the cost of education now ballooning, it’s not impossible to find yourself struggling to keep on top of your children's educational needs. You can consider Parent PLUS Loan to see if it is the right financing option for you.
To know more, visit StudentLoans.gov.
Disclaimer: There are risks involved when applying for loans. Ensure you consult the terms and conditions page before agreeing to anything.
