What You Need to Qualify for a Parent PLUS Loan

Parent PLUS Loans are federal loans available to parents of dependent undergraduate students. These loans can help cover education costs not met by other financial aid. To qualify for a Parent PLUS Loan, several criteria must be met:

1. Eligibility Requirements:

   • The borrower must be a biological or adoptive parent of a dependent student who is enrolled at least half-time at an eligible institution.
   • The borrower must be a U.S. citizen or eligible non-citizen with a valid Social Security number.
   • The borrower must not have an adverse credit history. If there is an adverse credit history, the borrower may still qualify if they have an endorser or can document extenuating circumstances.

2. Application Process:

   • Submit a FAFSA: The Free Application for Federal Student Aid (FAFSA) must be completed by the student. The Parent PLUS Loan application is separate but is often submitted through the same financial aid office.
   • Complete the PLUS Loan Application: The application can be done online through the Federal Student Aid website or by contacting the financial aid office of the student’s school.
   • Credit Check: A credit check is performed to ensure the borrower does not have adverse credit. This check assesses credit history and current financial status.

3. Loan Limits and Interest Rates:

   • Loan Limits: The maximum amount that can be borrowed is the cost of attendance minus any other financial aid the student receives. There is no set limit, but the amount must be justified by the educational costs.
   • Interest Rates: Interest rates are fixed and determined annually by the federal government. The rates are set for the life of the loan, and borrowers should check current rates before applying.

4. Repayment Terms:

   • Repayment Period: Repayment typically begins immediately after the loan is disbursed, though parents can apply for deferment if the student is enrolled at least half-time.
   • Repayment Plans: Several repayment plans are available, including standard, graduated, and income-contingent repayment plans. Parents should choose the plan that best fits their financial situation.

5. Benefits and Considerations:

   • Benefits: Parent PLUS Loans offer flexible repayment options, including deferment during the student’s time in school. They can also be consolidated with other federal loans.
   • Considerations: The interest rates are generally higher than other federal student loans, and the borrower is responsible for repaying the loan even if the student does not complete their education or has trouble finding employment.

Overall, qualifying for a Parent PLUS Loan requires meeting eligibility criteria, completing the application process, and understanding the terms and conditions of the loan. Parents should carefully consider their financial situation and explore all available financial aid options before committing to a Parent PLUS Loan.