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The parent PLUS loan is a student loan from the U.S. government that can be used to assist your child in paying for college. S. Department of Education designed for qualifying parents of undergraduate students. Any qualified educational costs that are not already covered by other forms of financial assistance may be paid for by the borrower using the loan. The Parent PLUS loan may be a good option for you if you need financial assistance, provided you are aware of the interest rate and total cost of the loan over time.
Is a parent PLUS loan right for me?
There are various options available to you when deciding how best to pay for your child’s college education. Parent PLUS loans have advantages unique to the federal government and might be less expensive than certain private loans, which makes them fantastic. However, there are questions to consider before applying:
- If all of your other options have been exhausted, a parent PLUS loan may be a good choice. Has your child applied for grants and scholarships? However, you should advise your child to explore all of their options for receiving free money, such as grants and scholarships, before taking out a loan that you will eventually have to pay back.
- Are you eligible? You must be a U.S. citizen in order to be eligible for a parent PLUS loan. S. citizen or qualified noncitizen, and not have a history of bad credit Your child must be enrolled as an undergraduate student at a recognized institution for at least half of the time.
- The current interest rate for Direct PLUS Loans (including parent PLUS loans) is a fixed rate of seven percent. Can you get a better interest rate with private lenders? 54% of all loans disbursed before July 1, 2023 and on or after July 1, 2022 A private lender might be able to offer you a better interest rate if your credit score is high. Prior to deciding to apply for a parent PLUS loan, research your options for private loans and find out where you can get the best rates.
When is a parent PLUS loan not ideal?
Not everyone should take out a parent PLUS loan because there are severe financial repercussions, such as wage garnishment, if you are unable to repay the loan.
Under the parent PLUS loan program, there is no maximum amount that can be borrowed, so it is possible to borrow more than you need. These loans are also not eligible for income-based repayment plans. Parent PLUS loans are best avoided if you have other debt obligations or live on a fixed income.
How can you apply for a parent PLUS loan?
The parent, not the student, is the one who applies for and is accountable for repaying the parent PLUS loan. The Department of Education is the place where parents can apply for this kind of loan.
The steps to apply for a parent PLUS loan are as follows:
Determine if you’re eligible for the parent PLUS loan
Prior to being eligible for a parent PLUS loan, you, the borrower, need to fulfill three conditions:
- You have to be the biological or adoptive parent of a dependent child who attends a participating university full-time as an undergraduate student. Under certain circumstances, a stepparent can apply for this loan.
- You cannot have an “adverse credit history. Although there isn’t a minimum credit score needed, certain negative marks on your credit report, such as tax liens, bankruptcies, and loan defaults, may disqualify you. However, if you can add a co-signer (also known as an endorser) with a clean credit record or if you can demonstrate that your credit issues were the result of unusual circumstances, you might still be qualified for a parent PLUS loan.
- The borrower and the student must fulfill the general eligibility requirements for federal student financial aid. The borrower must be a U. S. citizen or a qualified noncitizen, possess a Social Security number, and be enrolled in a program and school that meet the requirements.
Have your child fill out the FAFSA
The student must complete the Free Application for Federal Student Aid (FAFSA) form before the parent can apply for the parent PLUS loan. Then you can follow the instructions provided by your school to apply for a Direct PLUS Loan. Remember: No FAFSA, no parent PLUS loan.
Calculate how much much you want to borrow
You may borrow the whole cost of your child’s attendance, less any scholarships or financial aid that they may have received. This covers the cost of books, supplies, transportation, room and board, tuition, and fees for loans. Other costs, such as those for a personal computer, daycare, study abroad fees, and expenses connected to a disability, might also be covered. The total amount varies by school.
Remember that you can always borrow more money later on; only take out what you really need.
Apply for the loan through the Department of Education website
Applications for parent PLUS loans can be completed online at the Department of Education’s website. The information you enter will be sent to your child’s school, and the school will determine if you qualify for a parent PLUS loan. The application process typically takes about 20 minutes to complete.
Have the following information on hand before starting the online parent PLUS application process:
Sign the Master Promissory Note
You will be required to sign the Master Promissory Note prior to receiving your loan. This is a legal document. You accept all of the terms of the loan when you sign it.
Under the terms of the Master Promissory Note you sign, you may be eligible for more than one loan, but you will need to apply for a new parent PLUS loan annually. They may last up to ten years in certain circumstances.
Learn about repayment options and refinancing
Repayment of a parent PLUS loan starts once money is sent to your child’s school. Parent PLUS loan repayment is not automatically postponed while your child attends school; however, you can request a postponement of repayment for the six months following your child’s enrollment at an eligible school by submitting a separate application.
You can apply for a private student loan if you need to refinance your parent PLUS loan. You have the option to refinance the loan under your own name or, in certain situations, to give the loan to your child.
FAQ about parent PLUS loan applications
- Prepare your documentation before submitting an application for a parent PLUS loan. This contains your Federal Student Aid ID, the data about your students, your income and employer, and any supporting documentation you used to file the FAFSA. To ascertain how much you must borrow, you should also do the calculations using a student loan calculator.
- The deadline for parent PLUS loan applications varies by institution. Every award year, June 30 is the federal deadline for submitting the FAFSA; however, many colleges have earlier deadlines. Find out when the deadline for completing a parent PLUS loan is by contacting your child’s school.
- In the event that you have previously experienced credit difficulties, you may be declined for a parent PLUS loan. You should check your credit before applying for a PLUS Loan to see if anything is preventing you from being approved because there is a credit check involved. Prior to finishing your application, take care of any outstanding debt that needs to be paid off or any negative marks that need to be cleared. If you have a bad credit history, your application may be rejected, forcing you to look for other sources of funding.
Parent PLUS loans, which are frequently offered at lower interest rates than private loans, enable parents to assist in covering their child’s tuition costs. These loans are not the best option for all borrowers, though, as they are usually not eligible for forgiveness plans or income-based repayment plans.
FAQ
When can I apply for a 2023-2024 PLUS loan?
After April 1, 2023, students will have access to “Apply for a PLUS Loan” for the 2023–2024 school year. Your promise to repay your loan is outlined in the Graduate PLUS Master Promissory Note, which is a legally binding contract between you and the Department of Education.
What is the deadline to apply for a parent PLUS loan?
Parent PLUS loan applications must be submitted by June 30th, when the FAFSA closes.
When to apply for 2023 student loans?
Fill out a Free Application for Federal Student Aid (FAFSA®) between October 1 and October 31, 2023, to be eligible for federal student aid for the 2023–2024 award year. 1, 2022, and 11:59 p. m. Central time (CT) on June 30, 2024. Updates or corrections to the FAFSA must be made by 11:59 p.m. m. CT on Sept. 14, 2024.
Can you get a parent PLUS loan at 24?
The student must be younger than 24 years old and a dependent of the parent borrower. In the event that a PLUS loan is denied, students 24 years of age or older may borrow the same amounts of money through an unsubsidized Direct loan.
Read More :
https://studentaid.gov/plus-app/parent/landing
https://www.bankrate.com/loans/student-loans/parent-plus-application-guide/