Parents can borrow a PLUS Loan to help pay for their child’s education expenses if their child is a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your school’s financial aid office.

Also, parents will be required to pass a credit check. If they don't pass the credit check, parents might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if they fail to do so.  Parents may also qualify for a loan without passing the credit check if they can demonstrate that extenuating circumstances exist.

For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed at 7.90 for Direct PLUS Loans. For 2009-2010, the variable rate for these PLUS Loans is 3.28%. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.

Parents will pay a fee of up to 4%of the loan, deducted proportionately each time a loan disbursement is made. For a Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, parents may be charged collection costs and late fees if they don’t make their loan payments when scheduled.

For PLUS loans made to parents that are first disbursed on or after July 1, 2008, the borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or wait until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.

Under certain circumstances, parents can receive a deferment on their loans.

If they temporarily can’t meet the repayment schedule, they can also receive forbearance on their loan, as long as it isn’t in default. During forbearance, their payments are postponed or reduced.  Parents will be charged interest during periods of deferment or forbearance, since all PLUS Loans are unsubsidized,. If they don’t pay the interest as it accrues, it will be capitalized.

ParentPlusLoanConsolidation.com / ParentPlusLoanApplication.com
PlusLoanConsolidation.com / ParentLoan.org