The Parent PLUS Loan Program
or parents who are looking for help to finance post high school education for a dependent child, a parent PLUS loan is an option.
Parent PLUS loans are available through the Federal Family Education Loan (FFEL) and the William D. Ford Federal Direct Loan (Direct Loan) Programs. Direct loans are disbursed from the federal government. FFEL parent PLUS loans are administered and disbursed through private lenders.
To apply for a direct loan, parents must fill out the one page form available from the school’s financial aid office. To apply for a FFEL parent PLUS loan, an application that is available from the school, lender or state guaranty agency must be completed and submitted. The school completes its part of the application and sends it on to the lender for appraisal.
To qualify for a parent PLUS loan, parents must pass a credit check or find an endorser with acceptable credit who will agree to repay the loan if they cannot.
Funds are typically disbursed in two installments directly to the school. Parents may be required to sign the disbursement check and return it to the school. Funds are first applied to tuition, room and board and other school expenses. If there are any funds leftover, parents may direct them to their child’s student account or receive cash or a check. All remaining funds must be used for the child’s education.
Below are 4 additional facts about the parent PLUS loan program:
- Interest rates begin accruing when the loan is disbursed.
- Applicants must be United States citizens.
- Repayment may begin 60 days after the entire loan has been disbursed or after the student has ceased school enrollment on at least a half-time basis.
- The allowable loan amount may be reduced if other financial aid has been awarded.
Financing higher education for a child may require exploring a number of options. A parent PLUS loan is one way of getting the financial help parents need.