|
The federally-sponsored Parent PLUS Loan is a low interest
student loan for parents of undergraduate, dependent
students. With a Parent PLUS, families can fund
the entire cost of a child's education (less other financial
aid).
Parent PLUS Loans are available regardless of income
or assets, and no collateral is required. While your
parents do not have to prove financial need, a credit
check is required.
Features
- Many Sallie Mae lenders offer borrower benefits
on Parent PLUS loans that can save you money in repayment.
- Flexible repayment options are available.
- Postpone repayment for up to 60 months including
while your dependent child is in school.
- You can manage your account online 24/7.
- You get life-of-loan servicing from Sallie Mae.
- There is no prepayment penalty.
- There are no income or collateral requirements.
- Interest may be tax-deductible.
- Sallie Mae offers an easy online application and
approval process with an instant credit decision.
Eligibility
Parents must meet the following requirements to be
eligible for a Parent PLUS loan:
- You may apply for a Parent PLUS loan to pay for
the higher-education-related expenses of an undergraduate,
dependent child. Parents of independent students are
not eligible.
- You must be a U.S. citizen or national, a U.S. permanent
resident, or eligible non-citizen.
- A credit check is required.
- While the federal government does not require that
you file the Free
Application for Federal Student Aid (FAFSA) to
qualify for a Parent PLUS Loan, some schools do require
the FAFSA for Parent PLUS borrowers.
Limits
You may borrow up to the full cost of your child's
education less other aid received. Here are two examples:
| |
College A |
College B |
| Annual College Cost |
$10,000 |
$25,000 |
| Student Financial Aid Received |
(2,625) |
(9,625) |
| Parent PLUS Loan Eligibility |
$7,375 |
$15,375 |
|
Fees
There is a 3% origination fee charged by the federal government. Up to a 1% federal default fee is also charged.
Interest
The interest rate for Parent PLUS loans first disbursed on or after July 1, 2006 is fixed at 8.5%.
Use College
Answer's Repayment Calculator to estimate monthly
loan payments based on the principal balance, interest
rate, and loan term.
Repayment
- Standard
repayment: You make both principal and interest
payments each month up to a 10-year repayment term.
This plan has the lowest total interest cost.
- Graduated
repayment: You make reduced payments
in the early years of repayment and increased payments
thereafter, while still paying off the loans within
the maximum 10-year period. With graduated repayment,
you have a higher total loan cost than with standard
repayment.
- Income-sensitive
repayment: Payments are a percentage
of your gross income. You must reapply every year
for this plan and payments are adjusted annually to
reflect changes in income. With income-sensitive repayment,
you have a higher total loan cost than with standard
repayment.
- Extended
repayment: If you have high student loan debt,
you may be eligible for up to a 25-year repayment
term and the choice of standard or graduated payments
to keep payments affordable. With extended repayment,
you have a higher total loan cost than with standard
repayment.
- Student
Loan Consolidation: You combine your eligible
loans into a new loan with a single monthly payment
and a fixed interest rate. While student loan consolidation
can substantially lower your monthly payments, it
will generally result in a higher total loan cost.
back to top ^
|
