PLUS loan interest rates are among the lowest in the nation when it comes to any type of educational lending. This is especially true considering that this particular type of financial aid is intended for parents to be able to pay for their children’s education. And unlike financing through traditional banks or educational lenders, a PLUS loan interest rate will not be affected by a parent’s credit rating,
personal guarantee, or the provision of expensive collateral. In fact, PLUS loan interest rates are guaranteed for the life of the loan.
The PLUS loan interest rate for parents is fixed at 7.9%. Graduate and professional students are also able to obtain his loan at the same low rate of interest, but may have other requirements that need to be met. In general, in order to qualify for this federal program, a parent or graduate student cannot have a significantly adverse credit history, be in default or behind on any other types of federal financial aid or loans, and either have or be a student that is enrolled at least half-time in an accredited institution.
PLUS loan interest rates do not fluctuate like the terms of variable rate programs. This means that borrowers are able to determine precisely how much interest they will pay at any time over the life of the program. This is an especially useful feature if the Federal Reserve Bank continues to increase interest rates or if inflation continues at the rate the country has experienced in recent years.
In addition to the low fixed PLUS Loan interest rate, borrowers will greatly benefit from the ability to defer payments until after the student has graduated or dropped below half-time status. Additionally, parents retain permanent exclusive responsibility for the loan, thereby alleviating any financial burden that educational expenses would normally place on a student.
The PLUS loan program also includes a valuable rehabilitation and PLUS loan consolidation program that can help to lower monthly payments and decrease interest rates.
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