How to Understand a Parent PLUS Loan

The value of a college education is indefinable. The cost, on the other hand, is easily expressed in dollars and cents. Loans, grants and work-study help students pay for their education. The following are the steps on how to understand a parent PLUS loan.

Instructions

Difficulty: Moderately Easy

1. Apply for a Parent PLUS loan at a participating bank or credit union. This loan is between you and the lending institution.
2. Show that you have a good credit rating and have a dependent undergraduate student attending classes at least half-time.
3. Receive an amount up to the cost of attendance minus any other financial aid the student is receiving.
4. Start repayment 60 days after the final loan disbursement for the period of enrollment. There is no grace period.
5. Accept a variable interest rate capped at 9 percent. Interest begins accruing after the first disbursement of funds.

Tips & Warnings

• As of July 1, 2006, parents of dependent graduate students can take out PLUS loans.
• No loan meeting with the student is required.
• If you have co-signed other loans for your student, your debt-to-income ratio may be affected, and it may affect your credit rating.

Who Can Help:

• Learn more today about America's leading online University
• Flexible Scheduling, Online Programs, Get Info Now