Federal Student Loans
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Parent PLUS Loan Introduction
The Federal Parent PLUS Loan Program allows credit worthy parents to borrow money to pay for education expenses for each dependent, undergraduate, student enrolled at least half time in an approved college or university. These loans are available through both the Direct Loan and FFEL programs. Most of the benefits to parent borrowers are identical in the two programs, however some lenders do offer repayment and other savings benefits.
- A Federal Parent PLUS Loan allows parents to borrow the total cost of undergraduate education including tuition, room and board, supplies, lab expenses, travel less any other aid.
- These parent loans are non-need based. Unlike federal student loans, PLUS Loans are based on your credit rating, and the rating average that is considered "good" is usually 625 or better.
- The interest rate is fixed but adjusted annually by the Department of Education based on the 91-day Treasury Bill rate for the last auction in May of each calendar year. It is currently 8.5%.
- Parent loans require no collateral (like other type of loans - including home equity)
- Interest may be tax deductible.
Apply Today for the Parent PLUS Loan Program
The Primary benefit of the Parent loan is that parents can borrow federally guaranteed low interest loans to help pay for their child's education.
How do I apply for the PLUS Loan?
The Student Loan Network is pleased to be able to offer students and families a few simple and secure options for completing the Federal Parent PLUS Loan application. Please visit our PLUS Loan application page to start your application today.
Where should I mail my paper form to?
Please mail your paper form to:
The Student Loan Network
ATTN: PLUS Loan Application Returns
1250 Hancock Street, Suite 703N
Quincy, MA 02169
Do I need to fill out the FAFSA?
It is not required at all schools, but it is strongly recommended. The PLUS Loan is a federal student loan and therefore must be "certified" (approved) by the college's or university's financial aid office. If your college or university requires the FAFSA for all students, they will not certify a PLUS Loan (even though it's a loan for the parents) without a FAFSA on file. Check with your school's financial aid office.
Click here for information about how to file your FAFSA financial aid application.
Filing the FAFSA is a good idea because you or your child may be eligible for more financial aid than you think. Filing the FAFSA does not impact your eligibility for the PLUS Loan, as the PLUS Loan is based on credit, not need.
What is the interest rate?
8.5% fixed.
If you are a parent with PLUS Loans and want to lock in the lowest rate possible, you must consolidate your PLUS Loans after the final disbursement for that academic year.
Click here to consolidate your PLUS Loans!
What are the fees for a PLUS Loan?
Parents are required to pay fees of up to 4% of the principal of the loan. These include an origination fee of 3%, charged by the lender of the loan, plus a default fee of up to 1%, charged by the guarantee agency. These fees are deducted from the principal at each disbursement.
When my child is done with school, can I transfer the PLUS Loan to them?
No. The PLUS Loan is a Parent loan, taken out in the parent's name. The student is not the borrower. If, as a parent, you are interested in a loan that has such a feature, you'll need to resort to private student loans with cosigner release. These loans are in the student's name, and after a certain number of consecutive on time payments, the parent (as a co-signer) is released from the loan, making it entirely the student's obligation.
I'm an uncle/grandmother/friend - can I take out a PLUS Loan?
PLUS Loans are restricted to the parents or legal guardians of a dependent undergraduate student. Again, if you're interested in cosigning a loan for someone who is not your child, you'll need to borrow private student loans.
What kind of credit is required for a PLUS Loan?
Eligibility for the PLUS Loan depends on a modest credit check that determines whether the parent has an adverse credit history. An adverse credit history is defined as being more than 90 days late on any debt or having any Title IV debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.
To ensure that you can obtain a PLUS Loan for your child's education, it is essential to have a recent copy of your credit report.
As a service to Parent PLUS Loan customers, we offer you the ability to order your credit report and score online for a nominal fee, in partnership with the Fair Isaac Company.
What if I am not approved for the PLUS Loan?
There are several options if you are not approved for the PLUS Loan, as some applications are declined for reasons other than poor credit. If you are declined, you can:
- Apply for a Private Student Loan
- Apply for a Home Equity Loan
- Find a co-signer and apply again
I already have a PLUS Loan. How can I find out more information about it?
You can check the status of your loans by using the National Student Loan Database System (NSLDS). You can access NSLDS for free at www.nslds.ed.gov
When do I begin repaying a PLUS Loan?
Generally, repayment must begin within 60 days after the loan is fully disbursed. There is no grace period for these loans. This means interest begins to accumulate at the time the first disbursement is made. Parents must begin repaying both principal and interest while you are in school.
