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Student Life: The Ins + Outs of the Parent PLUS Loan

We all know school costs a great deal, and it doesn’t seem to be getting any cheaper. All too often, your child fills out scholarship after scholarship and takes out the maximum amount of Federal Direct Loans*, and it still isn’t enough! One option to fill the gap in funding is to look into the Parent PLUS loan.  The PLUS loan can be used to pay tuition and any eligible school expenses, minus any other aid your child receives. This is also a loan that is backed and funded by the Department of Education.

Paying for College: The Parent PLUS Loan | Image source: / Photographer: PathDoc

Although Parent PLUS loans may not be right for all families, there are some neat benefits for those who choose this route. This federal loan is actually taken out in your name instead of your child’s name. PLUS loans can provide more financial stability for your child since some of the school debt is handled by you.


  • Fixed 6.41% Interest
  • Option to have an interest rate 0.25% credit when you enroll in auto-payments
  • 4.204% Origination Fee
  • Deferment and forbearance options if you experience financial difficulties
  • 10 year repayment term
  • Option to refinance multiple loans into one

Maybe you have a unique family situation and are worried about whether or not you are eligible for this loan. Here are some of the requirements, as listed on the Federal Student Aid Website, you must meet in order to obtain this loan:

  • "You must be the student's biological or adoptive parent or the student's stepparent (if the biological or adoptive parent has remarried at the time of application.)"
  • "Your child must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. For financial aid purposes, a student is considered 'dependent' if he or she is under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid is submitted. (Exceptions are made for veterans, wards of court, and other special circumstances.)"
  • "If a student is considered dependent, then the income and the assets of the parent have to be reported on the FAFSA."

Also, they do a credit check when you apply for this loan. If you have poor credit history, you can only borrow a PLUS loan if you get an endorser with good credit to help you out. (An endorser is someone who agrees to repay the loan if you do not.) It’s also good to note that if you do have a few hiccups on your credit history, this would be a good loan to try and apply for, because if you are declined, your child may be eligible for more federal loans in his or her name. Keep in mind: Payments will begin 60 days after the loan is disbursed, because it is a loan for the parent and not the student. You can get this loan deferred so that you don’t have to make your first payment so quickly; however, this has to be requested at the beginning of the application process. If you don’t want a PLUS loan, but still need extra funds to fill the financial gap after using up your scholarships, grants and federal loans check out 3Rivers Student Choice Private Loan option.

*Keep in mind Federal Loans are a safer option than Private Loans, because if the loan holder were to pass away or become disabled, the loan would simply be forgiven. With private student loans, the loan balance would simply be handed down to the co-borrower- instead of being forgiven.
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