Who Is Eligible For A Plus Loan
Eligibility for Federal PLUS Loans The PLUS loan does not consider the borrowers future ability to repay the debt. As with Federal Stafford Loans, the student must be enrolled at least half-time and be making satisfactory academic progress, such as maintaining at least a 2.0 GPA on a 4.0 scale in college.
Options Following A Parent Plus Denial
An offer of a Federal Direct Parent PLUS Loan on the UC award offer is based on eligibility toward borrowing. At the same time, because the Parent PLUS Loan requires credit approval, not all PLUS offers can turn into secured loans.
The Parent PLUS Loan, unlike other federal educational loans, is credit-based. The credit review is not looking at income-to-debt ratios but instead heavily emphasizes the borrower’s debt payment history. Sometimes, unfortunately, the borrower’s financial history does not produce an approval and therefore limits access to the Parent PLUS Loan.
Even with a PLUS denial, you can attempt to secure funding through one of the options detailed below. Please if you wish to pursue one of these options. Without notice, the Federal Parent PLUS Loans will be canceled within one week of us being informed of the denial and removed from the award offer.
Federal Plus/parent Loans Help Parents Of Dependent Undergraduate Students Pay For College Or Career School
Meeting the cost of attending college can involve many resources: parent and student savings, diverting current income to make payments and financial aid. For some dependent undergraduate students, the amount of financial aid, savings and income may not be sufficient to pay for all college expenses. Parents are eligible to help their children meet college costs through the Federal PLUS Loan Program.
For Parents, There are two additional options are available on the UM-Dearborn PLUS Loan Application for Parents:
- Parents can authorize to have any excess funds beyond tuition to be released to the student directly
- Students can affirm that they wish to borrow additional Federal Direct Unsubsidized Loan if the PLUS Loan is declined
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Eligibility Criteria For A Parent Plus Loan
First, its good to know the qualification criteria to understand potential reasons why your loan request was denied.
In order to be eligible for a Parent PLUS loan, youll need to meet the following eligibility requirements:
- You must be the biological or adoptive parent of the student.
- Stepparents are eligible to borrow a Parent PLUS Loan while they are married to the students custodial parent.
- Your student must be a dependent undergraduate student enrolled at least half-time in a college that is eligible for Title IV federal student aid and participates in the Direct Loan program.
- You cannot have an adverse credit history, though there are some exceptions for extenuating circumstances.
- You and your child must be U.S. citizens or eligible non-citizens, not be in default on federal loans, and must meet other general eligibility requirements.
If you fail to meet any of these criteria, you might find that your loan application is denied. If thats the case, there are some options you should consider.
Denied Parent Plus Loan
< p> Does your school receive information that your parent has been denied a Parent PLUS loan? What information is shared with the school? Can I now get more aid?< /p>
< p> You now qualify for about $4k in more student loans. < /p>
< p> How much money do you need?< /p>
< p> Tell your school that your parents were denied a Plus Loan. The school either knows that or can find out.< /p>
< p> I am a senior. My father has been recently relieved of any responsibility through the courts. I will not be able to get private loans nor will my mom. Any suggestions?< /p>
< p> How much more are you looking for? Taking $9500 in Stafford loans for one year is a lot, imho…< /p>
< p> Yes. it is alot and guess what, the courts here in New Jersey have already ordered me to take out almost $20K . Here children are expected to take out loans so if I want to attend college the Court makes me first take out loans.State college here cost about $13K in tuition and fees – another $12K if you don’t live at home .< /p>
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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.
Sign A Master Promissory Note And Receive Loan Funds
Finally, youll sign a Master Promissory Note through the schools financial aid officethe loan agreement that outlines the terms of your parent PLUS loan.
Loan funds are then disbursed to your childs school and applied to outstanding charges for room, board, tuition, and fees. The school pays out remaining funds to you or the student, per your selection on the loan application.
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Ascent Student Loans Disclosures
Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations and terms and conditions may apply. For Ascent Terms and Conditions please visit: AscentFunding.com/Ts& Cs.
Rates are effective as of 10/01/2021 and reflect an automatic payment discount of either 0.25% OR 1.00% . Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates.
1% Cash Back Graduation Reward subject to terms and conditions, please visit AscentFunding.com/Cashback. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.
Can You Cancel A Student Loan Before School Starts
Yes. Before your loan money is disbursed, you may cancel all or part of your loan at any time by notifying the school. Your promissory note and additional information youll receive from the school will explain the procedures and time frames for canceling your loan.
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When Will I Have To Begin Repaying The Parent Plus Loan
Repayment and interest will apply to funds after the loan has been disbursed. The first payment of interest and principal are due within 60 days after the loan is fully disbursed. The parent may request an in-school deferment while the student is enrolled at least half time . If the student drops to less than half time or withdraws during the period for which the loan was intended, the entire amount of the Parent PLUS Loan is immediately due.
Parent Plus Loan Rates And Terms
Parent PLUS loan interest rates are currently fixed at 7%. They are tied to the rate of the ten-year Treasury note, with a cap of 10.5%.
The PLUS loan is given for one academic year at a time. As a result, parents must qualify for the loan each year. In other words, the credit check at year one does not make parents eligible for four years worth of Parent PLUS Loans. The loan enters repayment once it is fully disbursed, and there are a variety of repayment options available to parents, including deferment.
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Don’t Despair You Have Options
Many parents look to the Federal Parent PLUS Loan in order to help them finance their kids education. Although the US Department of Education does not look at a credit score or yourincome to debt ratio in order to approve a Federal Parent PLUS Loan, it does require that the borrower does not have anadverse credit historyfrom demonstrated poor financial habits. If the feds determine that you have an adverse credit history then the parent borrower will be notified that they have been denied. Dont despair. Know your familys option if you have been denied a Federal Parent PLUS Loan.
How To Apply For A Parent Plus Loan
Are you still thinking about applying for one of these monsters? Hopefully not. But maybe you enjoy horror stories . . . or rubbernecking fender-benders! If so, lets go over the steps to apply for a Parent PLUS Loan.
Step 1. Have your student complete a FAFSA. If you dont know, thats the Free Application for Federal Student Aid. Its found on the Federal Student Aid website. This is a good thing to do even if you and your child arent applying for any loans, because its necessary for receiving any form of financial aid, including scholarships and grants.
Step 2. Complete the Application. The exact title is the Direct PLUS Loan Application for Parents. Thats also found on the Federal Student Aid site. This is also where you decide how much you want to borrowwhich is obviously zero. If you were going to pull the trigger here , you would need to authorize a credit check.
At that point, the Department of Education will be in touch if you have adverse credit. Thats because they really want you to get this loan! Theyll tell you how you can appeal an adverse credit finding, or go find a cosigner. But we know youre too smart for that.
Step 3. Sign the Master Promissory Note. Thats the terms and conditions for paying back your loan. Youll see it there on the same government website as the application. We really hope you havent reached this step because once you sign, you will be locked in for at least 10 years of loan payments, and who knows how much in interest.
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Parent Plus Loan Repayment Options
Borrowers who are part of the Parent PLUS program are expected to begin repaying the loan as soon as the loan is fully disbursed, unless they request a deferment, which most parents do.
The deferment means you will not have to make payments while your child is enrolled at least half-time. When the child graduates, leaves school or drops below half-time, the deferment gives you a six-month grace period, after which you must begin making payments on the PLUS loan.
You should be aware that interest will accrue on the loan during the time you are not required to make payments. You can choose to pay the accrued interest or have it added to your loan principle balance when you start making payments.
Parent PLUS borrowers can choose from four repayment options.
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Parent Plus Loan Deferment Forbearance And Forgiveness
On the loan application, you can choose to defer parent PLUS loan payments during your students enrollment or begin making immediate full payments.
You can defer or seek forbearance for parent PLUS loans in other situations, too: if you lose a job, return to school, or encounter financial hardship or other qualifying circumstances. These loans are eligible for many other federal benefits and protections as well, such as forgiveness through the Public Service Loan Forgiveness program or other avenues, such as closure of your students school, or a death of the borrower or student.
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Why A Parent Plus Loan Might Be Denied
Unfortunately, some Parent PLUS loans are denied. If youve found yourself in that camp, now what do you do?
Parent PLUS loans have credit-related requirements to qualify. If your PLUS loan was rejected, it could be because of something found within your credit history or some other inability to meet eligibility requirements.
According to the Federal Student Aid website , PLUS borrowers cannot have an adverse credit history, such as having a debt payment 90 days overdue or having completed bankruptcy in the last five years.
Was your Parent PLUS loan denied? Dont lose hope yet because you still have options to consider: You could appeal the decision, get an endorser, maybe consider taking out a private loan, have your child request more aid, and search for more scholarships or other educational options with your student.
Can Parent Plus Loans Be Discharged In Bankruptcy
Parent PLUS Loans can be discharged in both Chapter 7 bankruptcy and Chapter 13 bankruptcy like other types of federal and private student loans. But you first have to file a lawsuit in your bankruptcy case called an adversary proceeding. In the adversary complaint, you’ll have to show the bankruptcy judge that repaying the loans would cause an undue hardship to you and your dependents. Meeting the undue hardship standard for student loan discharge is challenging.
Most bankruptcy courts use the Brunner Test to determine if you’ve met the standard. The Brunner Test reviews three criteria:
You can read more about the student loan bankruptcy process here.
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How To Determine Your Federal Student Loan Maximum
The maximum federal student loan amount how much you can borrow as direct subsidized, direct unsubsidized, or direct parent PLUS loans varies depending on your situation as you complete your FAFSA . You can figure out the limit to what you can borrow at a particular time by answering these three questions:
Plus Counseling Requirement For Grad/professional Applicants With Adverse Credit History
The U.S. Department of Education added a requirement that PLUS Counseling must be completed by Direct PLUS Loan applicants with an adverse credit history who qualify for a Direct PLUS Loan by obtaining an endorser who does not have an adverse credit history, or who document to the satisfaction of the Department that there are extenuating circumstances related to the adverse credit information.
The mandatory PLUS Counseling for certain applicants who are determined to have an adverse credit history is a separate module and does not fulfill the entrance counseling requirement for first-time graduate/professional student Direct PLUS loan applications. Depending on a graduate/professional students circumstances, he/she may have to complete both modules.
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Parent Plus Repayment Plans
Parent PLUS loans are eligible for four federal student loan repayment plans that can be used by parents:
- Standard Repayment: Fixed monthly installments over 10 years
- Extended Repayment: Fixed monthly installments over 25 years
- Graduated Repayment: Lower initial monthly installments that increase every two years, repaid over 10 years
- Income-Contingent Repayment : Income-based monthly installments are the lesser of 20% of discretionary income or fixed payments over 12 years the remaining balance is forgiven after 25 years
The only income-driven option open to parent PLUS loans is ICR, which requires you to combine those loans into a Direct Consolidation Loan.
Is It Okay For Parents To Hit Their Child
Its important to not spank, hit, or slap a child of any age. Babies and toddlers are especially unlikely to be able to make any connection between their behavior and physical punishment. They will only feel the pain of the hit. And dont forget that kids learn by watching adults, particularly their parents.
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What Is The Parent Plus Loan Program
The Parent PLUS Loan Program falls under the umbrella of federal student loans. The Direct Loan Program offers PLUS Loans to graduate or professional students, or parents. When a PLUS loan is borrowed by a parent it is often referred to as a Parent PLUS Loan. Unlike other types of federal student loans, PLUS loans require a credit check.
Most schools require parents to apply for a PLUS Loan by filling out an online application, though some schools may have an alternate process. Before filling out the online application for a Parent PLUS Loan, the student must fill out the FAFSA® or Free Application for Federal Student Aid.
