PLUS loans do not enjoy the same level of attention that is paid to other forms of financial aid available on the FAFSA such as Stafford loans, Perkins loans, and the FSEOG. This is because PLUS loans are for parents. A PLUS loan allows a parent to fund their children’s education with a low interest rate and great terms on a loan that would be difficult or impossible to obtain elsewhere. However, because most of the information provided on the FAFSA or Free Application for Federal Student Aid is aimed at students, the availability of the PLUS loan is not widely known.
PLUS loans are loans that are offered to parents as a type of federal financial aid. These loans are provided as a way for parents to fund their children’s education when direct payments to the school are not an option. Backed by the full faith of the US government and administered by the United States Department of Education, PLUS loans are not like traditional educational loans. Depending on your parent’s credit situation, a PLUS loan may be easier to obtain than another type of unsecured loan, and they offer features and benefits that cannot be found with other loan types.
Some unique features to PLUS loans include the option to take deferments, payment holidays, or forbearances in times of difficulty, or during certain “life events.” Regardless of the parent’s payment history on the PLUS loan, it will have no bearing on the student’s credit whatsoever. This allows a student to study in a reduced stress environment that is more conducive to superior academic performance.
PLUS loans offer a 7.9% fixed rate of interest, and can be large enough to cover the entire cost of a student’s education, including living expenses, transportation costs, books and laboratory fees, tuition, health insurance, and even meals.
Not every parent can afford to pay out-of-pocket for their children to go to college, but with a PLUS loan from the federal government, this dream can become a reality for many parents who want the best for their children.
Have too many educational loans and want to consolidate your loans to get a lower monthly payment?
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