Choose a country
United States
Select a city
Select a city
Select language
English
Select country
Choose a country
United States
Canada
España
México
Philippines
United States
Việt nam
Казахстан
Россия

Parent PLUS Loans

Apply for parent PLUS loans online, including options for bad credit. Compare rates and find optimal solutions for your educational needs. Secure the funds you need for your education without delays.
Offers: 5
Updated:
29.02.2024
12:13
SoFi
Private Student Loans
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
from $1,000
Rate
i

Effective interest rate on the product

up to 11.66%
Term
i

Loan term for the financial product

up to 15 years
Sallie Mae
Student loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
up to $15,000
Rate
i

Effective interest rate on the product

up to 12.85%
Term
i

Loan term for the financial product

up to 15 years
Apply
Navient
Private Student Loans
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
from $5,000
Rate
i

Effective interest rate on the product

from 5.8%
Term
i

Loan term for the financial product

up to 30 years
Apply
LendKey
Private Student Loans
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
from $2,000
Rate
i

Effective interest rate on the product

from 4.89%
Term
i

Loan term for the financial product

up to 15 years
Apply
Nelnet
Private Student Loans
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
up to $57,500
Rate
i

Effective interest rate on the product

from 4.49%
Term
i

Loan term for the financial product

up to 25 years
Apply
Reviews
CreditFresh
4.8
The application process was a breeze, and I received a response within minutes. This straightforward and prompt procedure proved to be a great help to me during a crucial time of need.
Review
JG Wentworth
4.6
The assistance I received was exceptional. My representative handled my case with care and provided all the necessary information...
Review
OneMain Financial
4.4
The loan application process was straightforward, and the representative I interacted with displayed patience, provided informative answers, and was quite pleasant throughout...
Review
My Funding Choices
4.6
The process was swift and straightforward, which was particularly helpful during a time when, despite my reluctance to seek assistance, I genuinely needed help.
Review
Plain Green Loans
2
The interest rate is shockingly high, and it feels like taking advantage of individuals facing financial challenges when unexpected expenses arise...
Review
Advance America
4.6
I have never encountered any issues with this company. They consistently deliver funds on time, and the repayment process is straightforward...
Review

What are Parent PLUS Loans?

Parent PLUS Loans are federal student loans offered to parents of dependent undergraduate students to assist in covering educational expenses. These loans, part of the federal student aid program, help bridge the gap between the cost of attendance and other financial aid received. Parents with an eligible dependent student can apply for a Parent PLUS Loan to support their child's education. It's essential to note that a credit check is conducted during the application process to assess the parent borrower's adverse credit history. The loan offers fixed interest rates, and repayment options include the Income Contingent Repayment Plan. Parents can apply for Parent PLUS Loans through the Direct PLUS Loan application on the Federal Student Aid website, and the funds are typically disbursed directly to the school.

Features

  1. Loan Funds. Parent PLUS Loans provide financial assistance directly to the parent borrower to cover educational costs not met by other financial aid.

  2. Loan Repayment. Repayment options are available, including monthly payment plans and the Income Contingent Repayment Plan, offering flexibility to the borrower.

  3. Loan Interest Rate. Parent PLUS Loans come with a fixed interest rate, providing predictability in loan payments throughout the loan term.

  4. Loan Limits. The loan amount is determined by the cost of attendance minus other financial aid received.

Pros and Cons

Pros

Fixed Interest Rates. While PLUS loans require a credit check for approval, everyone that gets one has the same interest rate. This means borrowers with a fair credit score will get the same rate as someone with excellent credit.

Borrow Up to the Cost of Attendance. Parent PLUS Loans allow borrowers to request loan amounts up to the cost of attendance, providing flexibility in covering educational expenses.

Defer Repayment. Parents have the option to defer repayment until after their dependent undergraduate student graduates, giving the family some financial flexibility.

Cons

Credit Check Required. One of the drawbacks is that a credit check is necessary for loan approval, and adverse credit history may impact eligibility.

Interest Rates and Fees. Parent PLUS Loans may have relatively high fixed interest rates and fees compared to other federal student loans, potentially making them more expensive for some borrowers.

Accrues Interest During Deferment. While repayment can be deferred, interest continues to accrue during the deferment period, potentially leading to higher overall loan costs.

How to Get a Parent PLUS Loan?

  1. Have Your Student Complete the FAFSA. Start by having your dependent undergraduate student complete the Free Application for Federal Student Aid (FAFSA). This form is crucial for determining eligibility for various federal student aid programs, including Parent PLUS Loans.

  2. Exhaust All Scholarship and Grant Options. Explore and maximize all available scholarship and grant opportunities for your student. These forms of financial aid do not require repayment and can help reduce the overall need for loans.

  3. Calculate Remaining Financial Gaps. After considering scholarships and grants, calculate the remaining financial gaps between the cost of attendance and other forms of financial aid. This will help you determine the amount you may need to borrow through a Parent PLUS Loan.

  4. Apply for a Parent PLUS Loan. Visit the Federal Student Aid website and complete the Direct PLUS Loan application. This process involves a credit check to assess your credit history. If approved, you can borrow up to the cost of attendance, minus any other financial aid received.

  5. Choose the Repayment Plan. Once approved, you'll need to choose a repayment plan. Options include standard repayment, graduated repayment, and income-contingent repayment plans. Consider your financial situation and preferences when selecting the most suitable plan for you.

Requirements and Conditions

Requirements

  1. Parent of a Dependent Undergraduate Student. You must be the parent of a dependent undergraduate student who is enrolled at least half-time at an eligible school. This includes colleges, universities, and vocational or technical schools that participate in the federal loan programs.

  2. Adverse Credit History Check. You should not have an adverse credit history. If you do have adverse credit, you may still be eligible by obtaining an endorser who agrees to repay the loan if you don't, or by demonstrating extenuating circumstances to the satisfaction of the U.S. Department of Education.

  3. General Eligibility Requirements. You and your dependent student must meet the general eligibility requirements for federal student aid. This includes demonstrating financial need for need-based aid, being a U.S. citizen or eligible noncitizen, and being enrolled in an eligible degree or certificate program at an eligible college or career/trade school.

Conditions

  1. Loan Amounts. Borrowers can request loan amounts up to the full cost of attendance, as determined by the child's school. This amount is calculated by subtracting other financial assistance your child will receive, such as scholarships and grants.

  2. Fixed Interest Rate. Parent PLUS Loans come with a fixed interest rate, which is set at 8.05%. This fixed rate provides borrowers with predictability in interest payments throughout the loan term.

  3. Repayment Term. Parent PLUS Loans automatically start on the 10-year standard repayment plan. However, borrowers have the option to switch their PLUS loans to a graduated or extended repayment plan. If consolidated, PLUS loans are also eligible for the Income-Contingent Repayment (ICR) plan.

  4. Loan Fee. A one-time loan fee of 4.228% is deducted from the loan disbursement. This fee represents a percentage of the total loan amount and is subtracted before the remaining funds are provided to cover educational expenses.

Who Issues Parent PLUS Loans?

Parent PLUS Loans are issued by the U.S. Department of Education. These loans are part of the federal student aid program and are designed to help parents of dependent undergraduate students cover educational expenses. The Direct PLUS Loan Program is administered by the U.S. Department of Education, and it allows eligible parents to borrow funds to pay for their child's college education.

Things to Pay Attention to

  1. Loan Eligibility and Half-Time Enrollment. Ensure that the dependent undergraduate student is enrolled at least half-time, meeting the eligibility criteria for Parent PLUS Loans.

  2. Loan Request Process and Financial Aid Office. Familiarize yourself with the loan request process, which involves applying for a Parent PLUS Loan through the Federal Student Aid website. Communicate with the school's financial aid office for guidance on the application and any specific requirements.

  3. Loan Repayment Options and Interest Monthly Payment. Understand the various loan repayment options available, such as standard, graduated, and income-contingent plans. Be aware of the interest monthly payment and how it impacts the overall cost of the loan.

  4. Origination Fee and Other Loan Fees. Take note of the origination fee, a one-time fee deducted from the loan disbursement. Consider how this fee and other potential loan fees may affect the total amount you receive.

  5. Master Promissory Note and Valid Bank Account. Complete the Master Promissory Note, a legal document outlining the terms of the loan. Ensure you have a valid bank account for the disbursement of loan funds.

How to Repay a Parent PLUS Loan?

  1. Understand Repayment Options. Familiarize yourself with the available repayment plans, including standard, graduated, and income-driven options.

  2. Choose a Repayment Plan. Select the repayment plan that aligns with your financial situation and preferences. You can switch plans if needed.

  3. Initiate Repayment After Disbursement. The Parent PLUS Loan first payment typically begins immediately after the loan is fully disbursed. Be prepared to make monthly payments.

  4. Explore Deferment or Forbearance if Needed. If facing financial challenges, consider deferment or forbearance options, allowing temporary suspension or reduction of payments.

  5. Stay in Contact with Loan Servicer. Maintain communication with your loan servicer, update contact information promptly, and address any concerns or changes in financial circumstances.

Reasons for Getting Rejected for a Parent PLUS Loan

  1. Adverse Credit History. If the parent borrower has an adverse credit history, they may be denied approval for a Parent PLUS Loan. Problems in the credit report, such as a tax lien, can negatively impact the credit check and result in loan rejection.

  2. Eligibility Criteria Not Met. Failure to meet the eligibility criteria, including being a U.S. citizen, eligible non-citizen, and having a dependent undergraduate student enrolled at least half-time.

  3. Unsatisfactory Loan Repayment History. Previous issues with federal student loan repayment or a history of default on federal loans can lead to rejection.

  4. Financial Instability. Unstable financial circumstances or insufficient income may be a factor in the denial of a Parent PLUS Loan.

  5. Outstanding Student Loan Debt. Having significant existing student loan debt may impact the parent borrower's ability to take on additional loans.

Alternatives

  1. Private Parent Loan. Parents can explore private loans specifically designed for education, offered by private financial institutions. These loans may have different terms and conditions compared to federal Parent PLUS Loans.

  2. Private Student Loan. Students themselves can consider private undergraduate loans to supplement other financial aid. Private loan options are offered by private lenders and can help cover educational expenses not met by federal aid.

  3. Federal Student Loan. Dependent undergraduate students can apply for federal student loans, such as Direct Subsidized Loans or Direct Unsubsidized Loans, to help finance their education. These loans often have more favorable terms than private loans.

  4. Scholarships or Grants. Seeking scholarships or grants is a valuable alternative to loans. These forms of financial aid do not require repayment and can significantly reduce the overall cost of education.

Editorial Opinion

Parent PLUS Loans serve as a vital financial resource for families navigating the costs of higher education. These loans, offered by the federal government, provide parents with the means to bridge the financial gap in funding their dependent undergraduate student's education. While Parent PLUS Loans offer the advantage of a fixed interest rate and the ability to borrow up to the full cost of attendance, it's crucial for parent borrowers to consider the potential downsides. The accrual of interest, loan fees, and the obligation to begin repayment shortly after disbursement are aspects that warrant careful attention. Moreover, the eligibility criteria, including the credit check, may pose challenges for some families. Despite these considerations, Parent PLUS Loans remain a valuable option for those seeking federal assistance to support their child's educational pursuits. As with any financial decision, a thorough understanding of the terms and implications is essential for informed choices.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender

  1. Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.

  2. Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.

  3. Carefully review all the terms and conditions of your payday loan contract.

  4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

  5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

  6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Methodology

At Finanso, we've carried out a comprehensive analysis of over 100 lenders, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.

Our ultimate goal is to provide insightful recommendations and expert advice to assist you in selecting a lender that best caters to your specific needs.

Other Personal Loans

FAQ

Are parents responsible for Parent PLUS Loans?

The parent borrower who signed the master promissory note (MPN) is legally responsible for paying back the loan money. This responsibility cannot be transferred to their child.

What is the max Parent PLUS Loan amount?

Parent PLUS Loans do not have loan limits, meaning that you can get enough funding to cover all education-related expenses.

Do Parent PLUS Loans get forgiven?

If you work a full-time eligible nonprofit or government job, you qualify for the Public Service Loan Forgiveness program. Another forgiveness option is accessible (after 25 years of repayment) for any loan borrower who chooses the income-contingent repayment plan.