5 Tips for Parents Considering PLUS Loans | 05.10.13
Parent PLUS loans are just one option for parents to help cover the costs of college. To help you decide if this is a good option for your family, take a look at the following tips on applying for and managing your Parent PLUS loan.
1. Determine if it’s the right choice for you
What I mean by this is, Parent PLUS loans are solely in the name of the parent, and cannot be transferred to the student. Before applying, make sure you know that you’ll be responsible for paying it back. If you’d rather be a cosigner on a loan in the student’s name, then your best option would be for your student to apply for a private student loan.
2. Don’t stress about credit
PLUS loans have minimal credit requirements when compared with private loans. The check does not take credit score into account, and only looks back 5 years to determine if there are any adverse credit issues during that time.
If you did have an issue during that time, don’t fret! You have the ability to appeal a declined PLUS loan if you have extenuating circumstances. For more on what constitutes an extenuating circumstance, read A Parent’s Credit and PLUS Loans.
3. Utilize the financial aid office
Have questions about your credit or the PLUS process? Utilize your financial aid office. They will explain how they’d like you to apply and should be able to answer any questions you have about the process. You can also go straight to the source and contact the Department of Education (800-433-3243), but since the application process is school-specific, the financial aid office is typically a good first step.
4. Choose repayment wisely
Did you know that you can defer a PLUS loan as long as the child is enrolled in school? You can also choose to begin repayment immediately to cut down on interest payments. The option you choose is up to you, and you can update your choice at any time by contacting your loan servicer.
5. Know who to contact to manage your loan
While most of the PLUS process is completed through the school, once the loan is disbursed, you’ll need to contact your student loan servicer. This is the company that was assigned to manage your loan. To find this information, along with loan balances, visit NSLDS.ed.gov and log in using your Federal Student Aid PIN.
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