October 26, 2006

Can I Borrower a Plus Loan to Pay Back My Daughters Private Loans?

Posted in Parent PLUS Loans, Student Loan News at 9:08 AM by kpops

This question was asked of me today from a borrower who has just recently heard of the Parent Plus Loan. She thought that borrowing the Parent Plus Loan would help her out of the huge interest rate she is paying on her private student lans. Unfortunately, the answer to this questions is No, you can not borrow a Parent Plus Loan in order to pay back any loans as the funds get disbursed directly to the school. Federal Loans such as the Parent PLus Loan are for upcoming cost of attendance only. The loans can not be consolidated with a private loan or turned into Federal Loans ever. In order to improve your interest rate on private student loans you may want to consider Private Loan Consolidation with one or more credit worthy co-borrowers. The better the combined credit score and history, the better interest rate you will receive.

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans


1 Comment »

  1. financialaidpodcast said,

    I’m not positive about this – if a parent takes out the loan and is qualified, the school receives the funding, but if the money disbursed to the school is in excess of the student’s account, shouldn’t the school cut a check to the student?

    I’d ask a financial aid officer if they could exercise some kind of exemption or something.

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