Fill Out And Complete Your Parent Plus Loan Application
You can fill out and submit the direct PLUS loan application for parents through the Federal Student Aid website. Once you’ve applied, the application details will be forwarded to the school for processing.
You will need your student’s verified Federal Student Aid ID and school name to get started. The application is divided into four segments:
- Loan information: You’ll enter the award year and your student’s name, address, phone number, Social Security number and date of birth. In this section, you will also include the school’s information, specified loan period and whether you want to defer loan payments while your student is enrolled in school and during the six-month grace period following graduation.
- Borrower information: This section asks for your citizenship status, address and employer’s information.
- Review: You will review your entries on this page and make any edits if needed.
- : The final page of the loan application requests your consent for a credit check. It also includes important notices and certifications you must agree to before you can submit your application.
If you have a security freeze in place on your credit report, reach out to the credit bureaus to have it lifted. Otherwise, your application cannot be processed.
Learn About Repayment And Refinancing Options
Make sure youre keeping track of your parent PLUS loans as you go and that youre aware of when the repayment will kick in. For many parents, learning how to apply for a parent PLUS loan isnt the hard part repaying it is. Its smart to explore your repayment options for parent PLUS loans now so you can quickly adjust if you find yourself struggling with payments.
Student Loan Rates Are Rising
Apply for a private student loan and lock in your rate before rates get any higher.
Before you apply for a parent PLUS loan, its helpful to check if youll qualify for this type of federal student loan.
And dont just go off your childs financial aid award letter. Even if parent PLUS loans are included, youll need to meet the eligibility guidelines. On the other hand, you might be able to borrow through Parent PLUS loans even if they arent listed on the award letter.
Eligibility requirements for parent PLUS loans include the following:
- You must be the biological or adoptive parent of a current student.
- Your child must be a dependent undergraduate enrolled at least half time at a college that participates in the federal direct loan program.
- You and your child must meet all other eligibility requirements for federal student loans.
- You must not be in default on any federal student loans.
- Your credit must not be adverse. The Department of Education defines an adverse credit history as one that includes a current delinquency of 90 days or longer. It also includes borrowers who have certain derogatory marks within the past five years, such as bankruptcy discharge or foreclosure. The full definition of adverse credit is outlined here.
The last requirement makes parent PLUS loans unique among federal student loans, most of which have no credit requirements.
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Compare The Plus Loan And Alternative Educational Loan Programs
Many students and families need to borrow additional funds to meet the cost of education. The decision becomes whether to borrow through the Parent Loan or a private student loan program.
Fast facts about Parent Loans vs. Private Student Loans
- Parent Loans have a fixed interest rate . Private student loans may have a fixed interest rate but most likely have a variable rate that is “capped” well beyond the parent loan rate.
- Parent Loans cannot be transferred to the student’s name, however a parent is equally liable for a co-signed private student loan.
- Parent and most private student loans can both be deferred from payment while the student is in school.
- Parent loans require that you pass a credit check. Private alternative loans will require a more thorough credit screening.
- Accrued interest on a Parent loan will capitalize at repayment. Private alternative loans may capitalize interest as often as quarterly.
- Parent loans are federally insured against the death or disability of the parent or student. Private alternative loans may be insured but many are not.
Our office is not able to recommend a specific lender to you. However, for your convenience we are able to provide you information about historical borrowing trends at Coe College.
Loans that require “certification” from the college are generally going to offer you better terms and disburse funds directly to the college. Our office is committed to working with whatever financing option best suits your needs.
What Credit Score Is Needed For A Parent Plus Loan
No minimum credit score is needed to get a parent PLUS loan. Federal loans aren’t like private parent student loans, which use your credit score to determine whether you qualify and what interest rate you’ll receive.
But parent PLUS loans do have a credit check, and you won’t qualify if you have adverse credit history. That can include negative line items on your credit report like payments that are 90 days late, tax liens and more.
Check your credit for adverse information before applying for a parent PLUS loan. You are entitled to one free report a year from each credit reporting bureau Equifax, Experian and TransUnion or you can get a free credit report through NerdWallet.
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Direct Parent Plus Loan Instructions
Step 1: To apply for a Parent PLUS Loan:
- Log in to your account using your FSA ID.*
- Select “Parent Borrowers” dropdown
- Choose ‘Apply for a PLUS Loan’
- Follow the instructions to apply for a PLUS Loan
If you are a first-time parent borrower, then you will need to complete the following:
Step 2: Complete a Parent PLUS MPN
- Log in to your account using your FSA ID.*
- Select “Parent Borrowers” dropdown
- Choose ‘Complete Loan Agreement for a PLUS Loan ‘
- Follow the instructions to complete the Master Promissory Note.
If a parent successfully appeals or obtains an endorser, the parent borrower is required to complete online credit counseling for PLUS Loan borrowers. The PLUS Credit Counseling will help parents understand the obligations associated with borrowing a PLUS loan and assist them in making careful decisions about taking on student loan debt.
Complete Online Credit Counseling Only for an Appeal or Endorsed PLUS Loan
- Log in to your account using your FSA ID.*
- Select “Parent Borrowers” dropdown
These Loans Can Help Pay For Collegebut Also Lead To Debt Troubles
Imagine this scenario: Your son or daughter has been out of college for over a decade and moved on to a successful career. Your own career is coming to a close and retirement is only a few years away. And yet, you still owe thousands of dollars for your childs college bills. This scenario is a reality for many parents who take out federal Direct PLUS Loans. While these loans might seem like an easy way for parents to help their child with today’s education costs, in far too many cases, they put the parents financial security and retirement at risk.
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What Is Adverse Credit History
- A current delinquency of 90 or more days on more than $2,085 in total debt or
- More than $2,085 in total debt in collections or charged off in the past two years or
- Default, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of federal student loan debt in the past five years
Determine If Youre Eligible For The Parent Plus Loan
Before you can qualify for a parent PLUS loan, you must meet three requirements:
- You must be a parent biological or adoptive of a dependent child who is enrolled at least half time as an undergraduate in a participating school. Under certain circumstances, a stepparent can apply for this loan.
- You cannot have an adverse credit history. While theres no minimum credit score requirement, loan defaults, bankruptcies, tax liens and certain other negative marks on your credit report could disqualify you. However, you may still be eligible for a parent PLUS loan if you can add on a co-signer without adverse credit history or if you can prove that extenuating circumstances led to your credit problems.
- Both the borrower and the student must meet the general federal student financial aid requirements. The borrower must be a U.S. citizen or an eligible noncitizen and have a Social Security number, and the student must be enrolled in an eligible program and school.
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Parent Plus Loan Master Promissory
The Master Promissory Note is the official loan agreement that describes the terms and conditions for repaying the loan. The same parent who completes the PLUS Loan Request must sign the MPN before the loan funds can be sent to the school. The MPN is also available on your StudentAid.gov account.
Note that an MPN is good for 10 years, so you may only need to sign this on the first application. However, in subsequent years, each request for a Parent PLUS Loan will start a new credit check.
If two different parents would like to apply for Parent PLUS Loans, each must complete this application process separately. If requesting funds in the same year for the same student, the total combined amount may not be higher than the schools Cost of Attendance.
Guidelines for requesting a Parent PLUS Loan:
- Same parent who will complete and sign the Master Promissory Note should request the loan.
- Parent, not the student, must request the loan.
- A parent must sign into the StudentAid.gov with their FSA ID. If you don’t already have one, you will need to create your own FSA ID.
Parent Plus Loan Interest Rate
The interest rates on Parent PLUS Loans are fixed and do not change over the life of the loan. The interest rate for the 2020-2021 academic year is 5.30%.
Every year on July 1, interest rates are reset based on current market rates.
The interest on a Parent PLUS Loan starts to add up from the date the loan is first disbursed. If the borrower does not pay the interest as it accrues, it will be capitalized , increasing the size of the loan.
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For Same Borrower And Same Loan Period For The Same Student
To increase a loan amount for the same borrower, same loan period, for the same student, you can submit a new application or select the option to “Change the application.”
If you choose to change the application:
For Same Borrower for Different Loan Period and/or Different Student
To increase a loan amount for the same borrower for a different loan period and/or different student: select the “New application option ” you cannot make a change to the original application.
Is It Possible To Accept Fall Only Federal Direct Stafford Loans
Yes. If you only want to accept fall loans, you should submit acceptance for only the fall loans, one loan at a time. If you have Subsidized loans in your financial aid package, accept and submit the fall Subsidized loan first. After the confirmation screen, accept and submit the fall Unsubsidized loan next. Do not submit all acceptances at one time and do not touch the spring loans.
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Danger : You Can Easily Borrow More Than You Need
When you apply for a Direct PLUS Loan for your child, the government will check your , but not your income or debt-to-income ratio. In fact, it does not even consider what other debts you have. The only negative thing it looks for is an adverse . Once you’re approved for the loan, the school sets the loan amount based on its cost of attendance. However, a schools cost of attendance is usually more than most students actually pay. This can lead to parents borrowing more than their child needs for college.
If you have other outstanding debt, such as a mortgage, you may find yourself in over your head when it comes time to repay the PLUS loan.
Timeline For Processing The Direct Parent Plus Loan
- The credit approval and a valid MPN must be completed.
- The student must be enrolled at least half-time.
Important: We encourage families considering the Direct Parent PLUS Loan to complete the entire application process well in advance of the start of the academic year. Late applications are unlikely to be completed before the fall term due date. Families who find themselves applying late should plan to use other means to cover the cost of attendance while their Direct Parent PLUS Loan application is pending.
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Complete A Parent Plus Loan Application
Once you know how much you want to borrow, you can start a parent PLUS loan application. Many colleges will request that you apply for a parent PLUS loan through StudentLoan.gov. However, as the application notes, some schools may have a different process for obtaining the additional information needed to process your direct PLUS loan application.
Provide loan and identification details
The parent PLUS loan application on StudentLoan.gov is actually a request for supplemental information, which you can preview here. Youll need to have your FSA ID on hand to file and submit this form.
The information youll have to provide includes:
- Loan details: the type of loan you need , along with your requested loan amount and period
- Academic information: the code and address of your childs college and the award school year
- Student information: your childs name, Social Security number, date of birth, permanent address and telephone number
- Borrower information: your name, Social Security number, date of birth, citizenship status, permanent and mailing addresses, phone number and email address
- Employment information: your employers name and address
Choose your deferment and disbursement preferences
You also will choose between a few parent PLUS loan options on the application:
Submit the parent PLUS loan application
Once youve completed all fields, you can submit the application using your FSA ID. Doing so will trigger an immediate credit check to see if you have adverse credit.
When Do I Begin Repaying My Plus Loan
Repayment of the Parent loan begins within 60 days of the full disbursement of the loan. For a full year loan repayment will generally begin sometime in February. Information about repayment terms and timing will be provided to you by your federal loan servicer. Repayments are made directly to the loan servicer. Borrowers generally have from 10 to 25 years to repay the Parent PLUS Loan. To calculate estimated loan payments, use the Direct Loan Repayment Calculator. Additional information is also available on the Federal Student Aid website under Repayment.
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How Are Loan Proceeds Paid
Loan proceeds are applied by the Coe College Office of Financial Aid directly to the student account, provided that all administrative requirements have been met. A loan for two terms will be divided in half. We will send an email to the address you provide on the Parent Loan application to let you know that the loan is approved and the final loan amount. Please review this email and contact our office with any questions.
What Happens If My Plus Loan Credit Check Gets Denied
A dependent student whose parent has been denied a PLUS loan during the current aid year may be eligible to receive Federal Direct Unsubsidized Stafford loans at the independent level with proof of PLUS loan denial from the lender.
If your credit has been denied for the Parent PLUS Loan, you will be given four options on the www.StudentLoans.gov application to choose from:
*For instructions on how to appeal or how to reapply using an endorser, please contact the Department of Educations Applicant Services at 1-800-557-7394. If the PLUS credit decision is approved after the parent appeals or reapplies with an endorser, the student is no longer eligible to receive the additional Unsubsidized Stafford loan.
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How Plus Loans Work
PLUS is an acronym for Parent Loan for Undergraduate Students.
The parent PLUS program allows parents to borrow money for dependent students to pay any costs not already covered by the student’s financial aid, such as Pell Grants, student loans, and paid work-study jobs.
PLUS loans have fixed interest rates for the life of the loan. They are typically repaid over 10 years, although there is also an extended payment plan that can lengthen the term up to 25 years. Interest on student loans from federal agencies has been suspended until September 31, 2021.
Parent PLUS loans are the financial responsibility of the parent rather than the student. They cannot be transferred to the student, even if the student has the means to pay them.
Loans As A Credit On Your Student Account Statement
Billing begins in early August for fall semester, January for spring semester, and May for summer semester. Your Direct Parent PLUS loan will appear as anticipated aid on your student’s account statement once the following have been completed:
- Your student has met the minimum eligibility requirements
- You have completed your Federal requirements
- You and your student have complied with verification
- If you have been approved for the PLUS loan with an Endorser, you must be sure that the endorser completes the “Endorser Addendum” and you have completed your “PLUS Credit Counseling” in addition to the MPN
Note: Direct Parent PLUS loans do not have to be accepted in LionPath by the student.
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