Learn everything about parent student loans, including eligibility, benefits, and drawbacks. This guide helps parents understand federal and private loan options, repayment plans, and important considerations before borrowing. Make informed financial decisions for your child's education with comprehensive insights into parent loans, their advantages, and potential challenges.

A Complete Overview of Parent Student Loans Before You Borrow

Parent loans, commonly known as PLUS loans, are intended for guardians financing their child's higher education, including graduate and professional studies.

Opting for a parent loan is a major financial decision with long-term implications.

Having a clear understanding of these loans is essential. This article highlights key details about parent student loans to help you make well-informed choices.

Qualification criteria include:

Your financial status is evaluated via the Free Application for Federal Student Aid (FAFSA).

To be eligible for a parent PLUS loan, a good credit history is required. Negative credit reports, such as bankruptcies or delinquencies, may result in denial.

You must be the parent or guardian of a dependent student enrolled in college or vocational training. This includes biological, adopted, and potentially stepchildren, provided you contribute more than half of their living and educational costs.

Federal regulations state that parents may qualify if their child's educational expenses exceed what other forms of aid, like grants or student loans, can cover.

Parent student loans come with benefits like flexible repayment options, including:
Deferment or forbearance during financial hardship or unemployment periods.
Parents can also access public service loan forgiveness after 10 years of regular payments.
Income-based repayment plans may forgive remaining balances after 25 years.

However, there are some disadvantages. Unlike undergraduate student loans, parent loans require repayment immediately after funds are disbursed, not after graduation. These loans typically carry higher interest rates and fees, with average rates around 7% interest and 4% fees in 2017-18.

Private lenders, such as banks, credit unions, and fintech platforms, also offer parent loans, often with terms that rival federal options.

Note:

Our blog provides detailed insights on various financial topics, based on thorough research. Remember, these articles are for informational purposes and should not replace professional advice. The website is not liable for discrepancies or errors from other sources. Some special schemes or offers may be more advantageous depending on your circumstances.