My parents make too much! How can I get a federal loan? | 03.23.10

Posted in PLUS Loans, Stafford Loan By Student Loan Network Staff

One question we get asked frequently from students in our financial aid forums is what to do when their parents’ income makes them ineligible for a federal Stafford loan. Many people are surprised to learn that if your parents make around $50,000 or more, or have particularly strong savings, they might earn too much to receive the need-based subsidized Stafford loans.

Fortunately, there are still a couple of federal-based options you can look into.

1. Unsubsidized Stafford loans. Among the best options for a non-need based loan, an unsubsidized loan from the government can go a long way in covering some of your tuition. One downside is the interest begins to accrue immediately upon disbursement.

2. Parent PLUS loans. PLUS loans (Parent Loans for Undergraduate Students) are loans are taken out by the parent in his or her name. The payments on these loans start right away and are not deferred if the child is still in school. These are a good way for a parent to still have a large say in the payment of their child’s education.

You also have the option to take out a private student loan. Like a subsidized Stafford loan, these loans needn’t be repaid until after graduation. Private student loans are, however, based on credit, not need.

ScholarshipPoints code: PARENT0310

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10 Responses to “My parents make too much! How can I get a federal loan?”

  1. Samantha R. says on April 23, 2010 at 2:07 am:

    This is good to know.

    Reply To This Comment
  2. Alex says on April 21, 2010 at 2:39 am:

    Thank you – Good Information!

    Reply To This Comment
  3. djadinto9 says on April 20, 2010 at 5:07 pm:

    My parents have already done enough for me, but i know they'll still help me out. LOL, its the interest rates that bug me the most.

    Reply To This Comment
  4. SNemo says on April 12, 2010 at 1:23 am:

    This doesn't apply to me, but my friend could really use this information. I will definitely relay the information.

    Reply To This Comment
  5. aaron says on April 8, 2010 at 3:09 pm:

    good info to know, i think there are other options for low interest loans

    Reply To This Comment
  6. 11-yr stdnt loan vet says on April 1, 2010 at 2:33 pm:

    For Parent PLUS loans disbursed on or after July 1, 2008, a parent can request a deferment based on their student's in-school status as long as the student's enrollment is at least half time. The deferment option was eliminated several years ago due to parent's financial situations not getting better when their PLUS debt was increasing. But they have had the option again for the last couple years. Again, they must request it…it's not an automatic. The parent should contact their lender/servicer to make the request.

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  7. tnm says on March 31, 2010 at 4:46 pm:

    In the end you will still have to pay something back

    Reply To This Comment
  8. latrice says on March 30, 2010 at 5:48 pm:

    great infor

    Reply To This Comment
  9. crystal says on March 27, 2010 at 9:52 am:

    alas, a lone means we still have to pay it at some point :(

    Reply To This Comment
  10. Vanessa says on March 26, 2010 at 6:04 pm:

    My Parents would never cosign:(

    Reply To This Comment

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