A Parent PLUS loan is a great way to get financing for college at low interest rates. If you're a dependent undergraduate student, you can apply to receive this special type of loan with your parents. This loan program helps your parents borrow money in order to pay for your tuition. As long as they have a good credit history and you are attending an eligible school, the funds are available.
A Parent PLUS loan is normally used to bridge the gap between federal student funding, scholarships and grants. If your financial aid package won't cover the entire cost of tuition, your parents can borrow the rest of the balance through the PLUS loan program.
This program is available at most major colleges and is part of the Federal Family Educational Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Each of these programs has a loan available and your parents can get one of the two, but not both, during the same period of time.
For the FFEL PLUS loan, your parents need to complete a PLUS loan application and then forward it to the school. The school will then fill out their portion of the application and then forward it on to the lender. The Direct Plus loan can be obtained by filing an application directly with a lender. The forms for both loans are normally available at the school's financial aid office.
Parent plus loans have anywhere between 7.9 and 8.5 percent interest rates, depending on which version of the program your parents are borrowing from. The interest accrues while you are in school, but no payments are due until you graduate. There is a 4% loan fee charge for each disbursement check that is deducted from each check. This fee is transferred to the guaranty agency and the government to help reduce the costs of loans.
There are two different types of repayment terms with parent plus loans. Your parents can either start repayment 60 days after the loan is disbursed or wait until six months after you leave school to start paying back the loan. The loans will be repaid to the private lending institution that made the loan in the first place.
Parent PLUS loans give your parents the opportunity to help you fund your education. If they or you have any questions about this loan program, ask your financial aid officer for the details and appropriate forms.
 | Many different types of federal financial aid are available, including Pell Grants, Perkins Loans, Stafford Loans and PLUS Loans, so learning about the various options is an essential first step in any strategy for financing a college education. |
 | A student can expect to qualify for a Federal Pell Grant if he or she meets certain conditions set forth in the application process. Generally, Federal Pell Grants are awarded to families who apply for a Pell Grant with incomes of less than $20,000, although there are exceptions based on a student's total criteria. |
 | A Federal Stafford Loan is a loan structured under the Federal Student Loan Program that allows undergraduate and graduate students to borrow money to attend college. They are designed to supplement a student's personal finances and family contributions to higher education. |
A Federal Perkins loan is one of many ways in which the government offers funds so that students with financial needs can attend college. This federal loan program is available from the U.S. Department of Education and helps with the cost of undergraduate programs and graduate programs. |
Going into debt while you're in college is frighteningly easy. With the demands of your classes and a new social life, you might find that swiping that credit card is the easiest way to get the things you want and need. Rather than letting your credit card bills pile up, follow these tips for minimizing your debt while you are in college. |
