Eligibility and Benefits of the Parent PLUS Loan
By: echo_promotions | Posted: 24th July 2007
About the Loan:
The Parent PLUS Loan is a student loan that is sponsored by the federal government. Parent PLUS Loans enable parents to borrow money to pay the education expenses of their child who is a dependent undergraduate student.
Parent PLUS loans are given out based on the parent's credit. Interest rates are fixed and you don't have to repay it until after the 2nd disbursement.
Am I Eligible?:
-Good Credit: As we have said before, this loan is based on the credit of the parents.
-Enrolled at Least Half Time: You must be attending an approved college or university at least half time. "Half-time" generally means you are taking six or more credit hours per semester.
-FAFSA: Typically, you must complete the Free Application for Federal Student Aid, however, some schools do not require this. Check with your school's financial aid office to see if yours does.
-US citizen: You must be a US citizen, permanent resident, or citizen of American Samoa or Swain's Island.
What are the Benefits?:
-The greatest benefit of the Parent PLUS loan is that parents are able to get a loan to assist their child in financing their higher education.
-Parent PLUS loans have federally guaranteed low interest. The current interest rate (as of July 1, 2006) is 8.5%.
-Private Lenders offer incentives such as interest reduction and cash rebates.
-Whether or not you receive a loan is based on your credit history. This means you won't be turned down because your income is too high.
-A Federal PLUS Loan allows parents to borrow enough money to pay for tuition, room and board, supplies, lab expenses, and travel.
-Interest could be tax deductible.
How Much Can I Borrow?:
You can borrow the amount of your educational costs minus any other financial aid. For instance, if it costs you $8,000 per year to attend school and you have been given $2,000 in other kinds of financial aid, your parents can borrow up to $6,000.
The money is given directly to your school. It's disbursed in at least two installments and used to pay for tuition, fees, and room and board. Any extra money is mailed to your parents to be used for your other educational needs.
Repaying Your Parent PLUS Loan:
Parent PLUS loans must be repaid in less than ten years. If you must extend your repayment terms, consolidation is your only option.
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To learn more about other low interest loans visit our Low Interest Student Loans page. Being a college student herself, Elise Fisher loves writing articles for her website About-Student-Loans.com.
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Tags: enough money, private lenders, cash rebates, disbursement, free application for federal student aid, federal student aid, current interest rate, education expenses, half time, credit interest, permanent resident