May 15, 2009

Whose Name is a Parent Plus Loan In?

Posted in Parent PLUS Loans at 12:04 PM by dbonvie

Parent Plus loans are taken out on behalf of the student by the parent, meaning it is in the parents name. The student is also listed on the application, but that is for enrollment purposes. It is the parents FICO score they run to see if they qualify, and thus, it is the parents responsibility to see to it that the loan gets repaid.

A common misnomer that many students and parents share is when a student gets out of school they can consolidate all federal loans together under one umbrella in their name; which includes parent plus loans, Stafford loans, and Perkins loans. The fact is they cannot. They can consolidate Stafford and Perkins loans, but the Parent Plus loan must remain in a parents name.


1 Comment »

  1. Sherry Ransdell said,

    When do you have to start paying for the parent plus loan? I am very confused by all the financial aid info. Nothing has been spelled out clearly. I was told by the college that these loans can be deferred until my child is out of college. Can you starting paying on the loans before then? Can you pay them off early without penalties? Can you pay the interest only until they are done with school? I would really appreciate some clear answers. August is approaching and I am starting to get very worried that I have missed something.

    Thank you.

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