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Parent PLUS Loans – Major Overview

September 6, 2011

Parent PLUS Loans

Chances are pretty good that you have sometime heard about the Parent PLUS Loans when it comes to college tuition fees. Parent PLUS Loans were created for the sole reason for parents who choose to take out a loan for their dependant children. Whether you are reading this as the dependant relaying this information to your parents, or a parent looking for loan inforomation for your child, let us explain to you all you need to know about the Parent PLUS Loan. You will be introduce to the overall terms and benefits, eligbility requirements as well as how to get the loan.

Parent PLUS Loans

Parent PLUS Loans Benefits & Terms

  • You can borrow up to the cost of the childs education minus any other sources of financial aid that you are receiving (grants, scholarships, family contribution).
  • The students school will receive the money and will disperse it to the student.
  • The Parent PLUS Loans have a fixed interest rate of 7.9 percent.
  • Half time enrollement is required.
  • Every time a parent makes a payment, they pay a fee of 4 percent.
  • The repayment of the loan starts the day the loan is disbursed, and the first payment is to be paid within the first 60 days of your student either finishing school, dropping out, or dropping below the half time enrollemnt.
  • Parents can choose to repay their loans with the Parent PLUS Loans repayemnt options which are: Standard (Same loan payment everymonth), Extended (lower payments for a longer repayment life), Graduated (payments start low and increase every two years). These plans range from 10 to 25 years to pay off the debt.
  • Student loan forgiveness is offered.
  • If you choose to cancel the loan, you will need to pay a fee.

Parent PLUS Loans Eligibility Requirements

In order to take out Parent PLUS Loans, parents  must fit the following requirements:

  • Parents must be either the biological parents or adoptive parents of the dependant child, although it is possible to get a step parent to sign for your loans.
  • You must be either a US citizen or a, resident permenantly or eligble non resident, no loan default or overpayment on loans

As for the students requirements, here are the prerequisits that students must follow:

  • The student must enrolled in at least a half time enrollment schredule.
  • The student must fit the follwing requirements; 24 years old or younger, must have no dependants, are not married, as well as not being a veteran, a ward of the court and lastly not a student who is looking to attain a college or professional degree.
  • Student must be a citizen of the US, resident permenantly or eligible non resident. ALso no loan default as well as overpayment on student loans.

How Parents Get Parent PLUS Loans

If you are serious about getting a loan for you student through the Parent Plus Loan program, then the parent needs to fill out two things; a Direct PLUS Loan Application as well as a Mastery Promissory Note. The Direct PLUS Loans Application is where you will fill out personal information and will figure out how much money you can qualify for, and the Master Promissory Note is the legal papers in which the parent states that they will repay the debt as well as the major terms of the Parent PLUS Loan. It is important to remember that if you intend on using Direct PLUS Loans for multiple years, you will need submit a request for a loan each year.