 Parent PLUS loan is sponsored by government. It has a low interest and is given to parents of undergraduate, dependent students. Families having a parent PLUS loan, can consolidate the entire cost of a child's education (less other financial aid).
Eligibility
• This loan is only for those parents which have undergraduate, dependent children. Parents of independent students are not eligible. It is possible to apply for a Parent PLUS loan to pay other costs which are related to higher-education.
• To get the loan you must be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen.
• A credit check is necessary.
Characteristics
• Federal parent PLUS loan can help you to save your money in repayment as many lenders offer borrower benefits.
• Flexible repayment choices are available.
• It is possible to delay repayment for up to 60 months including while your dependent child is in school.
• It is possible to get life-of-loan servicing from lenders.
• There is no prepayment penalty.
• There are no income or concomitant requirements.
• A lot of specialists work with parents to decide credit problems so that they may become PLUS eligible. It is possible for parents who are not PLUS eligible on the basis of their own credit to get a creditworthy endorser.
• Some interest rate reductions may be available.
Loan limit
It is possible to borrow up to the full cost of your child's education less other aid received.
Interest rate
• The interest rate for Parent PLUS loans first repaid on or after July 1, 2006 is fixed at 8.5%.
• Loans first repaid before July 1, 2006 can be changed, they established every year, and capped at 9%. The current interest rate through June 30, 2007 is 7.94%.
Fees
The federal government takes out a 3% origination fee. Up to a 1% federal default fee is also charged. Many lenders and guarantors can pay all or a portion of the default fee for loans guaranteed July 1, 2006–June 30, 2007.
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