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Parent PLUS loan applications: What you need to know

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Searching for ways to help your child pay for college? The parent PLUS loan is a student loan from the U.S. Department of Education designed for qualifying parents of undergraduate students. The borrower can use the loan to pay for any eligible educational expenses not covered by other sources of financial aid.

If you need financial help, the parent PLUS loan could be a worthwhile solution. Read on for a guide to the parent PLUS application and information about this federal loan option.

Is a parent PLUS loan right for me?

When determining the right way to finance your child’s college education, you have several options. Parent PLUS loans can be great because they have benefits specific to the federal government and may be cheaper than some private loans. However, consider these questions before applying.

Has your child applied for grants and scholarships?

A parent PLUS loan can be a good option if you have already exhausted all your resources. But you should encourage your child to look into all options for getting free money before you sign up for a loan that you will have to repay.

Consider the following options if you haven’t already:

Are you eligible?

Just like all federal student loans, parent PLUS loans have certain eligibility criteria:

  • You must be the biological or adoptive parent of an undergraduate student who is enrolled at least half time at a qualifying school.
  • You must not have an adverse credit history.
  • You must be a U.S. citizen or eligible noncitizen.

Can you get a better interest rate with private lenders?

The current interest rate for Direct PLUS Loans (including parent PLUS loans) is a fixed rate of 6.28 percent (for all loans disbursed on or after July 1, 2021, and before July 1, 2022). If you have a good credit score, you may be able to qualify for a better interest rate with a private lender. Look into private loan options and determine where you can get the best rates before deciding to apply for a parent PLUS loan.

How to apply for a parent PLUS loan

When filling out the parent PLUS loan application, it is the parent who applies and is responsible for its repayment, not the student. Parents can apply for this type of loan through the Department of Education.

Here are the steps to apply for a parent PLUS loan:

  1. Determine if you’re eligible for a parent PLUS loan.
  2. Have your child fill out the FAFSA.
  3. Calculate how much you want to borrow.
  4. Apply for the loan through the Department of Education website.
  5. Sign the Master Promissory Note.
  6. Learn about repayment options and refinancing.

1. Determine if you’re eligible for the parent PLUS loan

Before you (the borrower) can qualify for a parent PLUS loan, you must meet three requirements:

  • You must be a parent — biological or adoptive — of a dependent child who is enrolled at least half time as an undergraduate in a participating school. Under certain circumstances, a stepparent can apply for this loan.
  • You cannot have an “adverse credit history.” While there’s no minimum credit score requirement, loan defaults, bankruptcies, tax liens and certain other negative marks on your credit report could disqualify you. However, you may still be eligible for a parent PLUS loan if you can add on a co-signer (called an endorser) without adverse credit history or if you can prove that extenuating circumstances led to your credit problems.
  • Both the borrower and the student must meet the general federal student financial aid requirements. The borrower must be a U.S. citizen or an eligible noncitizen and have a Social Security number, and the student must be enrolled in an eligible program and school.

2. Have your child fill out the FAFSA

Though the parent will be applying for the parent PLUS loan, the student must fill out the Free Application for Federal Student Aid (FAFSA) form first. Then your school can direct you on how to proceed with the Direct PLUS Loan application. Remember: No FAFSA, no parent PLUS loan.

3. Calculate how much much you want to borrow

You can borrow the total amount of attendance costs for your child, minus any financial assistance or scholarships received. This includes tuition, fees, room and board, books, supplies, transportation and loan fees. Miscellaneous expenses, including a personal computer, child care, study abroad costs and disability-related expenses, may be eligible as well. The total amount varies by school.

Note that you can always borrow more in the future if you need. Do your best to only borrow what you need.

4. Apply for the loan through the Department of Education website

Applications for parent PLUS loans can be completed online at the Department of Education’s website. The information you enter will be sent to your child’s school, and the school will determine if you qualify for a parent PLUS loan. The application process typically takes about 20 minutes to complete.

Before you begin the online parent PLUS application process, have this information available:

  • Your verified FSA ID.
  • The school’s name.
  • Your student’s information.
  • Your personal information.
  • Your employer’s information.

5. Sign the Master Promissory Note

Before you receive your loan, you will be required to sign the Master Promissory Note. This is a legal document. When you sign it, you agree to all of the loan’s terms.

Though you will have to apply for a new parent PLUS loan each year, it’s possible to receive more than one loan under the Master Promissory Note you sign. In some cases, they are good for up to 10 years.

6. Learn about repayment options and refinancing

If you receive a parent PLUS loan, repayment begins after funds are disbursed to your child’s school. Repayment is not automatically deferred while your child is in school, but you can submit a separate application asking for a deferment while your child is enrolled at least half time at an eligible school and for six months afterward.

If you need to refinance your parent PLUS loan, you can apply for a private student loan. When you refinance, you can keep the loan in your name or, in some cases, transfer the loan to your child.

What to avoid in your parent PLUS application

When filling out the parent PLUS application, make sure that you have all the correct information and fully understand the eligibility requirements. Here are a few key things to avoid when applying:

  • Don’t apply before your child completes the FAFSA. Although the parent must fill out the application for the parent PLUS loan, the child must complete the FAFSA first.
  • Don’t apply if you are not the parent of an eligible college student. Only parents — biological or adoptive — can apply for a parent PLUS loan. Grandparents do not qualify. However, a stepparent may apply in certain cases.
  • Remove any credit freezes you may have before applying. If you have a security freeze on your credit file, you must remove the freezes with each credit bureau before submitting your application. If you do not, your application will not be processed.
  • Apply using the correct process for your child’s school. Most schools use the online application through the Department of Education’s website. However, some schools have a different process. When you are filling out the application, select the correct school and the website will let you know how to apply.

Next steps

Parent PLUS loans are a good first step for parents looking for help paying for a child’s education. While it’s always best to exhaust scholarship and grant options first, parent PLUS loans come with the benefit of federal protections, like defined forbearance policies.

With that said, if you have great credit, you may find a cheaper loan with a private lender. Before applying for any loan, compare all of the options available to you and weigh the pros and cons of federal versus private financial aid.

Learn more:

Written by
Emma Woodward
Contributing writer
Emma Woodward is a former contributor for Bankrate and a freelance writer who loves writing to demystify personal finance topics. She has written for companies and publications like Finch, Toast, JBD Clothiers and The Financial Diet.
Edited by
Student loans editor