The PLUS loan provides parents with a means to fund the cost of their children’s undergraduate education. PLUS loans feature a low, fixed rate of interest and flexible repayment terms. This includes the ability to defer payments on the loan until the student has graduated or drops below half-time status. In some cases, parents may even have the ability to request a forbearance during times of financial difficulty.
However, because a PLUS loan is granted to a parent rather than a student, the PLUS loan application process is not like that of other federal loan programs available via the FAFSA.
PLUS loan applications must be obtained through the financial aid office of the school being applied to. Parents must fill out a new PLUS loan application each academic year in order to qualify for the continued disbursement of funds. In addition to the PLUS loan application, a parent will also be required to sign a Master Promissory Note or MPN. However, unlike the yearly PLUS loan application, an MPN only needs to be signed once.
Information that must be included on the PLUS loan application includes financial, credit, and asset information. This information is used to ensure that the parent does not have an adverse credit history, and that the student who the parent is applying on behalf of is not past due on any federal student loans they might owe.
The PLUS loan application process also requires that both the parent and the student are US citizens and that the student is enrolled at least half-time. In order to continue to receive funds each year under the federal PLUS loan program, parents must make all payments in a timely manner. Parents whose PLUS loans are in a deferment status are strongly encouraged to pay at least the interest on their loan, as interest is compounded and accrues from the time the loan is disbursed.
The PLUS loan application process only takes a few minutes, and there is no obligation until you start withdrawing funds.
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