Federal Parent PLUS Loans

Education is noticed as the key to success in today’s society. Without a higher education, getting a job or career can be quite a challenge. Since so many people are getting a higher education in order to become successful, the educational system has become extremely expensive. Many students will need to qualify for a student loan and other types of loans in order to afford college tuition. Some students will need the help of their parents as well. In fact, many parents today are using student loans like Federal parent PLUS loans in order to send their kids to college.

A Federal PLUS loan is a type of loan that a parent borrows for their student’s education. In order for the parent to qualify for a Federal PLUS loan, they must meet a few guidelines that are set by the Federal Government. Not only do the parents need to meet certain guidelines, but the student also needs to meet certain guidelines as well. For example, parents will qualify for a Federal parent PLUS loan if their child is attending college at least half time or more. Students who are not attending college at least half time will be forced to seek out other student loan opportunities.

Parents must also pass a credit check that is usually associated with qualifying for a PLUS loan. If the parent’s credit rating is too low, they will not be able to use the Federal PLUS loan for their child’s education. This type of loan has a few advantages associated with it that parents and students should be aware of. Federal PLUS loans typically have low interest rates when compared to other types of student loans. The reason why this is actually deals with the fact that the parents must have an excellent credit rating for this type of student loan.

Another reason why these types of loans have a lower interest rate than other types of student loans is the fact that they are guaranteed by the government. Anytime a loan has a certain amount of guarantee by the government, it will typically be lower in interest. A Federal parent PLUS loan can be used to pay for tuition, room and board, books, and other education expenses that the student may be required to pay. These types of student loans are often used to subsidize what other student loans like Stafford loans do not cover.

Another benefit that a Federal parent PLUS loan is associated with is the fact that they are considered a type of loan where the borrower isn’t required to prove the need of the loan. For example, most student loans require the student or the parent to demonstrate the financial need of the loan. The PLUS loan does not require this, which means this type of student loan is called a non-need based student loan. Students and parents are advised to visit the FAFSA website to fill out the necessary information that is typically required when seeking out financial support for an education.

A Federal parent PLUS loan has an interest rate that is fixed, which means the interest rate will never go up or down during the life of the loan. Another benefit to this type of student loan is the fact that no collateral is needed to qualify for the loan. Most other student loans may require some form of collateral on the behalf of the parent or the student. Interest payments may have a tax benefit to parents as well with the Federal PLUS loan. Getting financial aid for a higher education is made easy by going online and researching the wide variety of options made available.