Aid Option: Parent PLUS Loans

six (6) quick notes about parent PLUS loans

Loan Summary
Pros-Cons
Loan Amounts
Current Rates
Loan Information
Who Qualifies

Parent PLUS Loan Summary

parent PLUS loan notes

Government guaranteed fixed rate loan that covers up to 100% of your dependent child's cost of education, less any financial aid awarded the child.

Designed to pay for education-related expenses as certified by the institution.

Loan Amounts:
up to the total cost of education minus any student financial aid given awarded
Interest Rates:
fixed for the life of the PLUS loan
No Restrictions:
does not require collateral; no prepayment penalties
Requires Credit Check:
pre-approval within minutes; funding can be made within 30 days or less
Loan Eligibility:
student must be enrolled at least half-time in an undergraduate degree or certificate program at an approved school. Borrower must have a satisfactory credit history.
Loan Repayment Terms:
repayment begins 60 days after disbursement

Next Topic: Pros-Cons

Pro and Cons of Parent PLUS Loans

parent PLUS loan notes

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Advantages (Pros):

Pays the Entire Cost
parents can borrow up to the total cost of education minus any financial aid received by the student
Low Interest:
federal PLUS loans are fixed rate loans that remain fixed for the entire term of the loan; current PLUS loan rates are about the same as most other financing options
Flexible Repayment Plans:
the federal government offers flexible repayment plans that can fit your budget. Loan payments begin 60 days after disbursements have been made to the school.

Disadantages (Cons):

Loan Must be Repaid by the Borrower:
the loan is underwritten for the parent or graduate; the parent or graduate is responsible for repaying the loan
Requires Federal Filings:
you must file the FAFSA form with the federal government in order to apply for PLUS loans. The FAFSA filing is used by colleges to determine your financial aid award
Credit Check Required:
in order to qualify for the loan, you must pass a credit check as set by the federal government
Multiple Borrowings:
you have to file and apply for a loan each academic year.

Next Topic: Loan Amounts

Parent PLUS Loan Amounts

parent PLUS loan notes

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Parents may borrow up to the cost of attendance (as determined by the school) minus the amount of any financial aid received (including received Stafford student loan amounts).

Borrowed funds will be paid directly to the school from the Federal Government. The school will first use the money to pay your child's tuition and fees. Any remaining PLUS loan money is credited to your child's account or paid to the parents directly.

The school must notify the parent of all credited funds.

Next Topic: Current Rates

PLUS Loan Rates

parent PLUS loan notes

Loan Disbursement Rates
for Parents Borrowers Fixed rate loans. Rate will not change for the life of the loan. Rate in effect from after: 07/01/2025 to before: 07/01/2026	8.94%

for Graduate and Professional Borrowers Rate will not change for the life of the loan. Rate in effect from after: 07/01/2023 to before: 07/01/2024	8.94%

Loan Fees
On or after Oct. 1, 2020 and before Oct. 1, 2026	4.228%
On or after Oct. 1, 2019 and before Oct. 1, 2020	4.236%

Next Topic: Loan Information

Loan Information

parent PLUS loan notes

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Parents may borrow up to the cost of attendance minus the amount of any financial aid received (including received Stafford student loan amounts).

PLUS loans are fixed rate loans with an upper limit, meaning that the rate will remain fixed for term of the loan.

You may be required to pay processing fees upon loan disbursement. Portion of these fees go the Federal Government and another portion to a guaranty agency to help reduce the cost of issuing the loans.

Generally these fees are deducted proportionately from each PLUS loan disbursement.

You may cancel the loan within 14 days after you receive written notification that funds have been credited to your child's account. Contact the school's financial aid office for cancellation terms.

More Information About PLUS Loans

The PLUS loan is available only to parents who can pass a credit check

If the parents fail to pass the credit check, they may receive the loan if someone with a good credit history co-signs for the loan or if the parent can show extenuating circumstances.

Interest paid on PLUS loans qualify for a tax reduction

Borrowers who file tax returns can deduct some of the interest paid on their student loans. Taxpayers who have taken out loans to pay for the cost of attending an accredited college for themselves, a spouse, or a dependent may be eligible for this deduction.

see IRS tax publication for more information:
tax benefits of higher education

PLUS loan repayment begins 60 days after loan funds have been disbursed to the school

deferments may be available for parents (the adult students) who are attending school at least half-time

About Repayment Options

The stardard repayment options are as follows:

Standard Repayment Plan:

time to repay: 10 years (120 months)
Your payments will be a fixed amount of at least $50 per month
You'll pay less interest for your loan over time under this plan than you would under the other plans

Graduated Repayment Plan:

time to repay: 10 years (120 months)
you begin payments that are low (equal to the interest accrued) and then increase over time until full repayment
perfect for graduates whose income will increase over time allowing for higher repayment amounts
you will pay more interest than using the standard repayment plan

Extended Repayment Plan:

time to repay: up to 25 years
must have $30,000 or more in student loan debt (consolidated)
your payments will be at the amount that ensures your your loan will be paid in full in 25 years.
you can choose the standard or graduated plans.

Income-Sensitive Repayment Plan:

the monthly payments change based upon annual income.
many plans have up to 20 years to replay
download the student aid booklet for more information about these income sensitive plans.

Next Topic: Who Qualifies

Who Qualifies

parent PLUS loan notes

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PLUS loans are available to the parents of dependent undergraduate students enrolled at least half time in an eligible program at an eligible school.

The student must meet the following criteria:

students who have access to parental support are classified as dependent students
dependent students and their parents must report respectively their income and assets on the FAFSA form

Students who display at least one of the following requirements are classified as independent students:

you were at least 24 years of age on January 1 of the academic year you begin school
you are married
you are enrolled in a graduate or professional program (beyond the bachelor's degree)
you have legal dependents other than a spouse
you are an orphan or ward of the court (or were a ward of the court until age 18)
you are veteran of the U.S. Armed Forces ("veteran" includes a student who attended a U.S. military academy who was released under a condition other than dishonorable)

parents of independent students do not quality for PLUS loans

How to Qualify for PLUS Loans

To qualify for federal student loans, the student must meet the following criteria:

display a need for financial aid (except for unsubsidized Stafford and PLUS loans).
complete high school and have been awarded a high school diploma or a General Education Development (GED) Certificate.
pass a college entrance exam approved by the U.S. Department of Education, and/or meet other standards your state may establish.
be enrolled or accepted for enrollment as a regular student working at least half-time toward a degree or certificate in an eligible program.
be a U.S. citizen or eligible non-citizen.
have a valid Social Security number, link to obtain SSN:
ssa.gov/online/ss-5.html
make satisfactory academic progress.
sign a statement on the Free Application for Federal Student Aid (FAFSA) certifying that you will use federal student aid only for educational purposes
sign a statement on the FAFSA certifying that you are not in default on a federal student loan and that you do not owe money back on a federal student grant.
register with the Selective Service (for young men age 18 and over). You can register online:
sss.gov