*Note: older loans, made before July 1, 2006 carry a variable interest rate that is equal to the 91 day T-Bill rate + 3.1% which is currently 7.94%. This rate is capped at 9.0%.
PARENT:
- Must be a parent (or step-parent or adopted parent) of a dependent student
- Be a U.S. citizen or eligible non-citizen and provide a valid Social Security number
- Pass a credit check
- Cannot be in default on another federal student loan or owe a refund on any federal student aid program
STUDENT:
- Must be enrolled at least half-time
- Must be less than 24 years of age
- Must have NO dependents
- Cannot be in default on another federal student loan or owe a refund on any federal student aid program
The school will then verify the student’s enrollment and apply the funds toward tuition, room and board, and other school charges.
If any loan funds remain, it will be sent to the parent unless the school is authorized to release the funds to the student or place them in a school account.
Understanding Education Loans
PLUS (Parent Loan for Undergraduate Students) loans are federal student loans for parents of undergraduate students. PLUS loans have a fixed interest rate and are available to cover up to the full cost of attendance, less other aid received.
- They can be used to cover the full cost of attendance, less other financial aid the family has received.
- A simple credit check is required for PLUS loans, but it only tests for adverse credit history (such as default on a prior federal student loan), not for a favorable credit score or debt-to-income ratio.
- PLUS loans are taken out in the parent's name - not the student's.
- PLUS loans usually do not allow for deferment while the student is enrolled, but some lenders may be willing to use forbearance to defer payments for some time; check with your lender for their policy.
How to Use the Education Loan Comparison Tools
Save time, energy and money by comparing multiple loan options from a variety of leading lenders. Simply enter the amount you need to borrow and a little bit about when you need the money and where your son or daughter goes to school to see a customized list of loan options.
What to Look for in an Education Loan
Use the comparison tools on this site to consider all of the costs of an education loan, including fees and rates. Students and their families should always borrow the most they can in federal loans first (such as Perkins, Stafford and PLUS) and then compare private student loans for the best rates, fees and costs.
Examine all of the attributes of each loan, such as:- the annual percentage rate (APR)
- the total cost of the loan
- the loan's borrower rewards
- student loan deferment options
FAQs
When does interest begin to accrue and when is interest capitalized?
Interest begins to accrue as soon as the first disbursement is made. Interest is capitalized when the accrued interest is added to the loan principal. Interest capitalization can occur when loan repayment begins, but may occur at other times, depending on your lender.
Tips
Always fill out the FAFSA, even if you think you won't qualify for financial aid.
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