What is a Parent PLUS Loan?

 In Loans, Parent PLUS Loan

Once families decide on a college, they are often left determining how to pay the remaining balance after financial aid is considered. While some families are able to rely on paying through their cash flow or savings, others look to financing options to foot the remaining bill. There are several loan options available for families. Today we’ll take a look at the Parent PLUS Loan.

As its name indicates, the Parent PLUS Loan is a loan in the parent’s name. The student’s custodial parent would be applying for the loan. I always remind families that the loan has no connection to the student in terms of repayment obligations. While this isn’t usually of concern, it can rule out the Parent PLUS Loan as an option for families who want the loans to remain in the student’s name while using the parent’s credit as a co-signor.

Parent PLUS Loan Application Process

Families can apply for the Parent PLUS here. The application is fairly straight forward, and families should receive a decision within 48 hours, if not immediately. It is a pass/fail system, so the interest rate is the same for all families that are approved for the loan.

If you are approved for the loan, you are able to take out up to the college’s complete cost of attendance.

What to do if You’re Denied the Parent PLUS Loan?

It’s also important to know that if the parent is denied the loan for whatever reason, the student can request additional Direct loan through the school as a results of the denial. Freshman and sophomores can receive up to an additional $4,000 in unsubsidized Direct loan per year, while juniors and seniors can receive up to an additional $5,000 per year.

Additional Information on the Parent PLUS Loan

For additional information on the Parent PLUS Loan, check out these additional resources:

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