Use Your Parents to Get a Student Loan
Eligibility and Benefits of the Parent PLUS Loan
<b>About the Loan</b>
The Parent PLUS Loan is a student loan that is sponsored by the federal government. Parent PLUS loans were created to allow parents to borrow money to fund their child's higher education. It is primarily for the parents of undergraduates who are their dependents.
These loans are given out based on the parent's credit. The interest rates are fixed and you don't have to repay it until after the second disbursement.
<b>Am I Eligible?</b>
-Good Credit History: As we have said before, this loan is based on the credit of the parents.
-Half-Time Enrollment: You must be enrolled in a college or university at least half time. This generally means you are taking at least 6 credit hours each semester.
-FAFSA: Normally, you must complete the Free Application for Federal Student Aid. Most schools will require this but some will not. You can ask your school's financial aid office if they require a FAFSA for Parent PLUS loans.
-US citizen: You must either be a US citizen or permanent resident. You can also be from American Samoa or Swain's Island.
<b>Benefits:</b>
-The best benefit is that parents can get a loan to assist their child in financing their higher education.
-These loans have have a maximum interest rate that is set by the Federal Government. The interest rate on the PLUS loan is fixed at 8.5% as of July 1, 2006.
-Private Lenders offer incentives such as interest reduction and cash rebates.
-Whether or not you receive a loan is based on your credit history. This means you won't be turned down because your income is too high.
-You can borrow funds to cover such things as tuition, housing, meals, books and supplies.
-Interest may be tax deductible.
<b>How Much Can I Borrow?</b>
You can borrow the amount of your educational costs minus any other financial aid. For example, if it costs you $8,000 a year to attend school and you have been given $2,000 in financial aid, your parents can borrow up to $6,000.
The money is given directly to your school. It is disbursed in at least two installments and used for tuition, fees, and room and board. If there is any money left over sent to your parents and it must be used for your education.
<b>Repayment: </b>
These loans must be repaid in less than 10 years. If you must extend your repayment terms, consolidation is recommended.
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About the Author
To learn more about other low interest loans visit our Low Interest Student Loans page. A college student herself, Elise Fisher enjoys writing articles to help college students learn more About-Student-Loans.com
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