Parent PLUS Federal Loans

Paying for college is expensive and it gets more expensive every year. However, there are many Federal loans available to students and parents to help meet the costs of attending college. One of these Federal loans is called the Parent PLUS Loan. Parent PLUS loans are non-need based federally guaranteed low interest loans (currently 7.9% fixed) that parents can take out to help cover the complete cost (this includes, tuition, room and board) of their child's college education minus any other aid the student is already receiving.

How to qualify for a Parent PLUS Loan

Parent PLUS loans are non-need based federal student loans. This means that you do not need to demonstrate any kind of financial need or hardship to qualify for these loans. Instead, eligibility for Parent PLUS loans is dependent on a modest credit check. Generally you will qualify as long as you have not been late on any debt, defaulted on any debt in the past five years, foreclosed, filed bankruptcy, or had wages garnished, tax liens or write-off.

Check with the specific school's financial aid department for detailed instructions on how to apply. Many, but not all, schools require that the FASFA Financial Aid Application be filled out to qualify for this loan.

How much money can you borrow?

Parent PLUS loan limits are determined by the cost of attendance for one year to the specific school minus and other aid the student is already receiving. The cost of attendance is the total amount needed for tuition, room and board, and any other eligible school expenses. The total dollar amount for the cost of attendance is determined by the school and can be found by either visiting the school's financial aid web page or calling the school directly. Other aid is any scholarships or other loans (like Stafford or Perkins loans) the student may be already getting.

So, for example, let's say that the cost of attendance for one year is $20,000 and the student is receiving $10,000 in scholarships and $5,000 in other federal loans. This means their total of "other aid" is $15,000. The parent can then barrow up to, but not more than, $5,000.

Finding out more

Before applying for a Parent PLUS federal loan it is a good idea to contact the college's financial aid department and set an appointment with a financial aid officer or counselor to discuss the loan and all the possibilities available to you and the student to help cover the costs of college attendance.

Sources:

Plus Loan, PLUS Loans: Federal Loan for Parents Introduction, ParentPLUSLoan.com