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Funding Your Education 1997-98PLUS Loans (Loans for Parents) |
CreditsSourceU.S. Department of Education's Office of Postsecondary EducationContentsCredits and AcknowledgmentsIntroduction Education after High School Paying Tuition and Other Costs Federal Pell Grants Campus-Based Aid Programs Federal and Direct Stafford Loans PLUS Loans (Loans for Parents) Stafford and PLUS Loan Questions Applying for Financial Aid Eligibility Criteria Deadlines and Verification Contacting the Department Reducing the Cost of School Taking the Next Step ForumsEducation and KidsRelated ArticlesPreparing Your Child For CollegeCollege Planning for Gifted and Talented Youth Getting Ready for College Advising High School Students with Learning Disabilities |
PLUS Loans to meet students' education costs are available through both the FFEL and Direct Loan programs. Parents who do not have a bad credit history can borrow a PLUS Loan to pay the education expenses of a child who is a dependent student enrolled at least half time in an eligible program at an eligible school. How do my parents apply for a loan?Your parents will fill out an application, which is available from your school's financial aid office. (It is not necessary for you or your parents to fill out a FAFSA to apply for this loan, unless your school requires it.) What requirements do my parents have to meet?To be eligible to receive a PLUS Loan, your parents generally will be required to pass a credit check. A parent cannot be turned down for having no credit history - only for having an adverse one. If your parents don't pass the credit check, they might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to co-sign the loan. A co-signer promises to repay the loan if your parents fail to do so. Your parents might also qualify for a loan even if they don't pass the credit check as long as they can demonstrate that extenuating circumstances exist. You and your parents must also meet other general eligibility requirements for federal student financial aid. How much can my parents borrow?The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you get. If your cost of attendance is $6,000 and you receive $4,000 in other financial aid, your parents can borrow up to $2,000. Who receives my parents' loan funds?Your school will receive the money in at least two installments. No one payment may exceed half of the loan amount. Your school might require your parents to endorse a disbursement check and send it back to the school. The school will then apply the money to your tuition and fees, room and board, and other school charges. If any loan money remains, your parents will receive the amount as a check or in cash, unless they authorize that it be released to you. Any remaining loan money must be used for your education expenses. What's the interest rate?The interest rate is variable, but it will never exceed 9%. From July 1, 1996 through June 30, 1997, the interest rate is 8.72%. The interest rate is adjusted each year of repayment. Your parents will be notified of interest rate changes throughout the life of their loan. Interest is charged on the loan from the date the first disbursement is made until the loan is paid off. When do my parents begin repaying the loan?Generally, the first payment is due within 60 days after the final loan disbursement for the year. There is no grace period for these loans. Interest begins to accumulate at the time the first disbursement is made, and your parents will begin repaying both principal and interest while you're in school.
Federal and Direct Stafford Loans |
