PLUS Loans

Most non-traditional students are independent, but if your parents still include you as a dependant on their tax return, the Federal Parent PLUS Loan can be a big help with your educational funding.

Your parents can borrow as much as they need to cover the cost of your education, minus your existing aid and other resources. In this way, the PLUS Loan is a government aid program designed to bridge the gap between the cost of attending school and your other funding.

Parental Assistance
Federal PLUS Loans offer parents or guardians competitive interest rates fixed for the duration of the loan and capped at a maximum of 9%. Their loan repayment period begins approximately 60 days after the disbursement of the loan. Your responsibility is to be enrolled at least half time in your educational program at the time you and your parents apply for the loan.

There are a few similarities between the PLUS Loan and other Federal loans, like the Stafford Loan. Your school participates in one of two loan programs--either the William D. Ford Direct Loan Program, with the Federal government as the lender, or the Federal Family Education Loan Program (FFELP), with a private lender. Ask your financial aid office for more information on the Federal PLUS Loan.

Federal PLUS Application Requirements
The PLUS Loan requires a parent credit check. This is one major difference from the Stafford Loan, which is awarded based on information you submitted on the FAFSA and is not dependent on a credit check. If your parents have trouble with the credit check, the PLUS Loan program provides credit counseling and offers other options, such as loan co-signers. It may be possible for your parents to qualify for a PLUS Loan with the help of a friend or relative who agrees to use their own credit history to help qualify for the loan. In this situation, the family friend or relative acts as an 'endorser' on the loan.

Talk to your school's financial aid office for more details and to apply for the Federal PLUS Loan. Your parents will need to complete much of the same paperwork required for a private loan. 

Talk to your parents about your long-term plans, and be sure they're aware that they will have to repay the PLUS Loan whether or not you complete your educational program. It may be possible to repay the loan together, but the legal responsibility for repayment will be on their shoulders, and could affect their credit rating as well as the credit rating of any endorsers if the loan goes into default.