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26

How do my parents get a Direct PLUS Loan

Author: Sally Croft

About 80% of all higher education students receive some form of financial aid, the majority end up with some amount of Student Loan. There are so many different type of loans to choose from (Federal, Private, Subsidized, Unsubsidized, Student, Parent, etc) that you need to know which is right for your situation. In the case of parent loans, you can look at the Direct PLUS program. This is a great program for parents who want to assist in paying for their child’s education but do not have the available funding.

Federal PLUS Loans

On the federal level, PLUS loans were originally made for the parents of undergraduate students (hence the name Parent Loans for Undergraduate Students) but in 2006 they became available for the parents of Graduate and Post-Graduate Programs. These loans benefit the student and the parent as they pay for whatever is lacking in funding for the student’s education and enable the parents to begin repayment of them immediately. There is no grace period for repayment which means you can consolidate them immediately if you so desire. The loans are low interest and have flexible payment plans which are appealing to any borrower.

What They Handle

Direct PLUS loans are intended to cover the costs of education that are not covered by all the other financial aid the student receives. Once you have exhausted all your Grants, Scholarships and Federal Loan opportunities and you know how much more you will need for your education, you can start filling out a PLUS loan application.

How Parents Get PLUS Loans

To be eligible for these Federal Loans you have to be a US citizen, permanent resident or eligible non-citizen. You also have to pass a credit check and, of course, have the student enrolled in a qualifying program. There are no income requirements or prepayment penalties. The PLUS loan will be made to cover the cost of education less all other financial aid that the student has received. If the student has not received any aid or is ineligible, you can borrow up to the full cost of the education. This loan can be of virtually any size and can be renewed annually.

Important Facts

There are a number of important facts that need to be remembered with the Direct PLUS loan program:

  • This is a loan that is required to be paid back. Not repaying your Student Loan can result in legal action, credit report changes and inability to take out another loan.
  • There are options for postponing payments in times of financial hardship with the Direct PLUS loan program as long as the student is enrolled at least half time.
  • Just about all of these loans are manageable online. Sallie Mae guarantees servicing for the life of the loan.
  • The interest can be tax deductible when you make payments on the loan during the course of the tax year.
  • Repayment begins 60 days after disbursement but you can start payments immediately.
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Posted in Direct PLUS Loan |

27 Responses to “How do my parents get a Direct PLUS Loan”

  1. alollurry says:
    October 1, 2008 at 1:10 pm

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  3. Best Student Loan advice for first timers | Student Loan Blog says:
    January 12, 2009 at 7:00 am

    [...] have their loan applications turned down by federal agencies; many parents are likely to have their PLUS Loan applications rejected if they have a foreclosure in the previous 5 years; a higher credit score is [...]

  4. PLUS Loan Relief in 2009 | Student Loan Blog says:
    January 19, 2009 at 2:37 am

    [...] and parents of students pursuing their graduation is one of the most sought after option. These PLUS loan options are guaranteed by the government and fall under the direct supervision of the US Department [...]

  5. Smart Solutions for covering your college cost | Student Loan Blog | Student Loan Blog says:
    February 5, 2009 at 1:27 am

    [...] you have exhausted every possible alternative under the federal student loan option you can try the PLUS Loan option. Wherein parents can get financial aid for their child’s [...]

  6. Financial aid options for US students in Canada | Student Loan Blog | Student Loan Blog says:
    February 5, 2009 at 1:33 am

    [...] Canadian schools recognized by the US Department of Education offer Stafford Loans to American students and PLUS loans parents of students pursuing their education in a Canadian School of Study. Stafford and PLUS are federal loan programs to students which come at a lower interest rate and feasible repayment options. The Canadian schools themselves offer a list of lenders for US based Stafford and PLUS Loans. [...]

  7. The Real Crunch - Repaying my Student Loan | Student Loan Blog | Student Loan Blog says:
    February 5, 2009 at 1:56 am

    [...] of student are now allowed to defer their PLUS loan repayment after their children complete their graduation. Previously they had to start repaying [...]

  8. How to Postpone Repayment of a PLUS Loan | Student Loan Blog | Student Loan Blog says:
    February 5, 2009 at 3:04 am

    [...] PLUS Loans are issued to the parents of students to cover the costs of their education that are not covered by the student’s regular financial aid (scholarships, grants, loans) to be sure all fees are paid. The loans are low interest and easy to get as they have no required credit check and are readily available. These loans used to be available to undergraduate students only, but in 2006 the Federal Loan Program began issuing them to the parents of students in graduate and post-graduate programs. [...]

  9. How Much Can My Parents Borrow on Student Loan? | Student Loan Blog | Student Loan Blog says:
    February 5, 2009 at 3:05 am

    [...] able to cover your education expenses. This is where the parent loan program comes into play. The PLUS Loan program allows parents to take out a loan to cover the remaining expenses incurred by the student. [...]

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  11. Sally Croft says:
    February 23, 2009 at 11:35 pm

    @ Angellaa, thanks. And I guess so.

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  14. RaiulBaztepo says:
    March 28, 2009 at 6:11 pm

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  15. Sally Croft says:
    March 30, 2009 at 12:23 am

    @ RaiulBaztepo and Free Credit Report thanks for liking the post and taking time out to give your valuable comments. Feel free to bookmark Student Loan Blog but do let me when linking it back.
    *Cheers*

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  20. Sally Croft says:
    August 17, 2009 at 12:17 am

    @ Marabellagonzalesduk: Hey Sarah thanks for stopping by and leaving your comment. I hope Student Loan Blog will keep on guiding you in future too. Also feel free to let me know what more you want to see here.

    ~ Happy Blogging

  21. Andre says:
    August 24, 2009 at 2:44 am

    Hi everybody,

    I think this post is very usefull for us and for our parent to know how to get a direct plus loan, with read this article we just know it, how.

    Good luck and nice site

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  26. Sally Croft says:
    January 11, 2010 at 1:37 am

    @ online stock trading advice: Thanks for liking Student Loan Blog as for getting RSS feeds you need to click on Subscribe to RSS option on right menu. This will lead you to a new window, mention the email address where you want to receive the feeds, you’ll get a confirmation email shortly & BINGO ;) …you will start receiving RSS feeds of the blog! Still if you encounter any problem do write to us again.
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