Taking out Student Loans is a fact of life when you are working on your higher education. Sometimes, even after you have all your financial aid in place, you still are not 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. This enables you to handle your coursework without the worry of finances and without having to work to pay for school. Depending on your personal style, this can free up a lot of time for studying… or not.

About Parent Loans

Parent Loans are issued to the parents of a student who is financially dependent on them and is in need of further funding to cover their education costs. They are low interest loans offered through the FFEL (Federal Family Education Loan) program and the Direct Loan Program which means they have really flexible payment options and the option of postponement. There is a credit check required to get the loan but the requirements are not very strict. Just about anyone can get this type of loan and it is disbursed rather quickly. The eligibility requirements are pretty simple too. You need to be a US citizen, permanent resident or eligible non-citizen and be able to give the relevant financial information.

How They Get the Loan?

The first thing you need to do is filling out the application online or on paper. There is a promissory note included in the application process whether you fill out the form online or on paper. After you have handled that part, your school will fill out another segment of the application and send it to the FFEL or Direct Loan Program to be reviewed for approval. Once they pass the credit check, your parents will be sent notification of approval. If they do not pass the credit check they will have to get a co-signer for the loan in case of default. When the money has been approved, it will be sent to your school. In some instances, a check will be sent to our parents to sign and send to the school but most of the time it is sent directly to the school in one or two disbursements.

How Much Is Too Much?

Generally, the amount they will get is whatever the remaining cost is to cover your finances. This means whatever you need is what they will get but not more. For example, if your total fees, housing and books cost $25,000 for the year and you have $20,000 in aid already, your parents will be given a total loan amount of $5,000 for that year in their PLUS Loan.