Helping Your Student with PLUS Student Loans

PLUS student loans can help make up the difference in the cost of a college education and the funding your student has already received through scholarships and independent loans. Any parents can look into the PLUS loan program, which is not need-based, and can be applied toward education costs for a number of children in each household. Ultimately, the PLUS option will be less expensive than most private student loans and still offer you considerable flexibility.

What is the PLUS Program?

The PLUS program is designed for parents who do not have large college savings accounts for their children to meet the high cost of education. They are open to low income and high income families alike. Nonetheless, PLUS loans are not designed to be the only form of loans to a student. They should be a part of the bigger equation, including: scholarships, Stafford loans and private loans.

What Expenses Qualify?

The main reason more than one set of loans will be needed for college is because the PLUS program does not assist with living expenses. This loan is to be spent only on the immediate costs of tuition. Room and board, books, supplies and dining expenses will have to come from another source. In fact, the funds are delivered straight to the college or university from the PLUS program. The limit is the cost to attend school, minus any other funds you are contributing to the cost of tuition.

How Do I Qualify?

While there is no real income requirement for a PLUS loan, there is a general credit requirement. You should be credit worthy as proven through your credit score, debt ratio and performance on any past installment loan. There is no collateral and no down payment required for the PLUS loan program, however, making it highly accessible to all families with a responsible financial profile.

How Do I Repay the Loan?

Repayment on federal student loans tends to be much more flexible than repayment on private loans. You will have to make payments immediately and cannot defer until after your student has graduated. That being said, the government does make hardship exceptions that make deferment possible. One of the best features of the PLUS loan is the ability to seamlessly consolidate and refinance the loan in the future. If you have multiple loans across a number of semesters or even across a number of students, you can consolidate these into one loan. There are also no prepayment fees on the loans. 

Where Do I Start?

Your student's school may require you to fill out the FAFSA Financial Aid Application to qualify for the program. The financial aid office at any college or university will have these forms available, or you can locate them online through the PLUS loan website. It is typically best to speak with a financial advisor at the school to determine which percentage of tuition will be paid by with part of each loan. Students who are financing an entire college education will have to balance the funds from each loan to make college affordable.

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