July 17, 2009
So what is a PLUS Loan, anyway?
Let’s review the basics as many of you will soon be signing PLUS Loan paperwork.
A Parent PLUS Loan is a federal student loan with a fixed interest rate of 8.5%. Parent PLUS Loans can be taken out by any parent or legal guardian to help pay for an undergraduate student’s college tuition, room and board.
You can borrow up to the total cost of education (tuition, on-campus housing and board, fees) minus any other financial aid received. What does this mean in real terms? If you get $2000 in scholarships and a $3000 Stafford Loan and the total cost of education is $40,000, then you can borrow up to $35,000.
PLUS Loans do require a credit check, but the credit requirements are FAR less stringent than just about any other loan you can think of.
And what happens if you get denied? Present the denial letter to your child’s school and they will qualify for more Stafford Loan money.