Parent Plus Loans
Students and parents of students often need financial help in order to get into and subsequently get through the years of education that leads to an advanced degree. Parent plus loans can help the parents of the students who can’t afford higher educational expenses. The Parent PLUS loans are borrowed by a parent on behalf of a child to help pay for tuition and school related expenses at an eligible college or university, or by a graduate student for graduate school.
There are many advantages of parent plus loans which reduces some burden from the parent’s shoulders. The main advantage of parent plus loan is that a parent can borrow a federally guaranteed low interest loan to help pay for their child's education. Another advantage is that it allows a parent to borrow the total cost of undergraduate education including tuition, room and board, and any other eligible school expenses, minus any aid the child is receiving in their name. The PLUS loans do not require any collateral to be placed by the parents. In addition, the interest that is paid on the loan may be tax deductible.
The student must be enrolled at least half time, and the parent or graduate student must pass a credit check in order to receive this loan. Usually, either the U.S. Department of Education or your parents' lender sends the loan funds to your school. The funds are firstly applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, the parents will receive the amount as a check or in cash, unless they authorize the amount to be released to you or to be put into your school account. Any remaining loan funds must be used for your education expenses.
There are also certain restrictions and requirements concerning the way the funds are to be disbursed. Be sure to get yourself informed before you decide to apply for these loans.