Paying for college can be challenging and parents often turn to personal loans and credit cards to manage college expenses. Still, when financial aid, scholarships, and even student loans aren't enough to cover the costs of a college education there are other options.
Federal Parents Plus Loans programs are a federally sponsored loan available for parents of undergraduate students. These low-interest student loans are another source of funding for tuition and other college expenses and funds are made available to most eligible undergraduate students.
Plus loans, this type of federal loan offers many benefits and most parents are eligible to apply.
Plus loans can be used to manage several college expenses such as:
Once the loan is approved, the funds are sent directly to the college and made available for the student. Most schools require parents to endorse the disbursement check, and payment is typically sent out in two installments. This process makes it easier to apply payments for all school charges, room and board expenses, and tuition costs in one simple step. Parents do have an option to cancel the loan within 30 days of the application and funding disbursement schedule.
Federal Parents Plus Loans are available through the Sallie Mae foundation and may be a better option than many other student loans and sources of financial aid. Plus loans are managed solely through the Sallie Mae foundation which makes it easier to manage payments throughout the loan term. There are no income or collateral requirements with Plus loans, so most parents and families can apply and obtain a loan with ease.
The guaranteed fixed rate of 8.5% makes this loan an attractive option for many parents and this rate is lower than average interest rates on credit cards and other personal loans. Even the interest paid on these student loans is tax deductible; this can help many parents manage yearly expenses, and some also qualify for Plus Loan Consolidation which can help lower monthly payments overall.
The application process for Federal Parent Plus Loans is relatively simple; students must submit a completed FAFSA Financial Aid Application before the due date, and parents will need to complete an official PLUS loans form for review. Parents may borrow up to the total cost of attendance, minus any other financial aid received.
Low-interest Plus loans make it easier to manage college expenses for your dependent student, but not all parents qualify. Families must be U.S. Citizens or nationals, a U.S. permanent resident, or an eligible non-citizen; a credit check is also required to determine financial eligibility. Parents of independent students do not qualify for these student loans, and must pursue other forms of financial aid.
Federal Parents Plus Loans are yet another option for managing college expenses and tuition costs, and offer a flexible, affordable loan program for parents of undergraduate students. If you're looking for additional sources of financial aid for your college student, Plus loans offer a number of benefits.