Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.
Follow these steps to apply for a Parent PLUS Loan, which is a helpful way to pay for your child’s school fees. (Shutterstock)
Parent PLUS loans are federal student loans available to parents rather than students. Parents can borrow up to the full cost of their child’s school attendance, minus any other financial assistance the student has already received.
Follow these seven steps to request a Parent Loan PLUSand learn about your options if your loan application is denied.
If you’ve exhausted federal financial aid options and need private loans to fill the gaps, visit Credible to view your prequalified student loan rates from various private lenders, all in one place.
How to Apply for a Parent PLUS Loan
Follow these seven steps to apply for a Federal Parent PLUS Loan.
1. Complete the FAFSA and Review Your Student Aid Report
Your first step to obtaining a Parent PLUS Loan is to complete the Free Application for Federal Student Aid (FAFSA) with your child.
You and your child must create a FAFSA ID online at StudentAid.govthen follow the instructions to complete and sign the form.
The FAFSA is generally available from October 1 for the following school year, and you should complete the FAFSA as soon as possible to ensure you receive your application before they run out of funds. The Department of Education will process your FAFSA and issue a Student Aid Report.
WHAT IS FAFSA?
2. Find out if you qualify for a Parent PLUS Loan
To obtain a Parent PLUS loan, you must meet the following eligibility requirements:
- You must be the biological, adoptive or step-parent of a dependent undergraduate student.
- The student must be enrolled at least half-time in a degree or certificate program at a school that participates in the Federal Direct Lending Program.
- You must be in financial need.
- You must be a US citizen or eligible non-citizen.
- You cannot default on other federal student loans.
You must also pass a credit check during the application process. This credit check does not take into account your credit score, so no minimum credit score is required to obtain a Parent PLUS loan. However, the credit check looks for an “adverse credit history”.
According to the US Department of Education, an unfavorable credit history includes:
- Have one or more debts with a total outstanding balance greater than $2,085 that are 90 days or more past due or that have been placed in collection or written off within the past two years
- Have one of the following within the past five years: Determination of Default, Bankruptcy, Foreclosure, Repossession, Tax Lien, Wage Garnishment, Write-off of Federal Student Aid Debt
3. Determine how much you can borrow
The maximum you can borrow with a Parent Loan PLUS is the cost of the child’s tuition after subtracting any other financial aid your child receives.
Each school determines its cost of attendance, which includes:
- Tuition and Fees
- Room and board
- Books
- Stationery
- Equipment
- Transportation
- Loan fees
- Miscellaneous personal expenses
Since you must indicate the loan amount requested on the Parent PLUS application, it is a good idea to discuss tuition and the amount you will need to borrow with your child’s college financial aid office.
WHAT IS THE AVERAGE COST OF TUITION FOR COLLEGES IN THE UNITED STATES?
4. Complete a Parent PLUS Loan Application
Once you know how much you want to borrow, you can start the online Parent PLUS application process.
Here are the four main sections of the Direct PLUS Loan Application for Parents:
- Loan information — Select the school year you plan to use the loan for, the name and credentials of the student you are using the funds for, the school your child will attend, and the amount you want to borrow.
- Borrower Information — Answer questions about your relationship to the student, citizenship status, contact details, and employment information.
- Exam – Review the answers you provided and verify that the information is correct.
- Credit check and quote — Authorize a credit check, review some important financial information, and check boxes to confirm that you have read the information and completed the application accurately and completely.
You will either get an immediate decision that your application is accepted, denied or pending. A pending application may be due to your credit security freeze, in which case you should call the credit bureau to have the freeze lifted before reapplying. It may also be because the information you entered does not match what is on file with the credit bureau, in which case you should call the Federal Student Aid Information Center at 1-800 -433-3243 for assistance.
5. Sign the refund agreement
If your application has been approved, your next step is to complete and sign a Master Promissory Note. It is basically a loan agreement promising that you will repay the loan, interest and fees to the Department of Education.
To complete the note, you will need to provide information about who you are, your student, and the school they attend. You must also provide the names and contact details of two personal references who do not live with you and who have known you for at least three years. The Ministry of Education will contact these references in the future if they are unable to reach you.
Finally, read the terms and disclosures, verify the accuracy of the information you provided, then sign and submit.
6. Receive your loan
The federal government will send your loan funds to your child’s school to pay for tuition, room and board, and other costs. If there are funds left over after covering these costs, the school will send you the balance to help pay for books, equipment, and other expenses.
WHAT IS A STUDENT LOAN REPAYMENT AND HOW TO GET ONE?
7. Start making a plan to repay the loan
By default, loan repayment begins immediately. However, you can request a deferral while your child is enrolled and for six months after leaving school.
Your loan officer should contact you with repayment instructions. Make sure you know when you need to start making monthly payments so you can fit them into your budget.
What happens if your parent PLUS request is denied?
If the Ministry of Education refuses your Parent Loan PLUS app, you’re out of luck. Consider the following options:
- Demonstrate extenuating circumstances. You can request an appeal if the denial was due to your credit history and explain that the derogating items on your credit report were due to extenuating circumstances.
- Find an endorser. If your application was denied due to your credit history, you may qualify for a loan with an endorser. An endorser is like a co-signer, and they agree to repay the loan if you can’t.
- Apply for private student loans. Some private student loans offer a lower interest rate than federal Parent PLUS loans.
If you’re ready to apply for a private student loan, Credible makes it easy to see your prequalified student loan rates from several lenders.
