If you are a parent looking to help your child pay for school, the Federal Parent PLUS Loan may be for you. When it comes to school loans, this loan is rather forgotten and is not the first thing families think of when looking to fund an education.The Parent PLUS Loan is a loan program that must be taken out only in the name of a parent or legal guardian. It is designed to cover more of college's expenses than a Stafford or Perkins loan does.
The amount of a Parent PLUS Loan is determined by taking the Total Cost of Attendance minus the Awarded Federal Need Based Aid.
A Parent PLUS loan is not a need based program and is similar to that of a private student loan. However, the interest rates are often lower and the terms of repayment of more favorable.There are two possible resources for Parent PLUS LOANS:
- The Direct Loan Program
- Federal Family Education Loan Program
The major differences between the two include interest rates, fees, and who you will be paying back. The Federal Family Education Loan Program is generally more expensive.
A Parent PLUS Loan is great for families who are looking to make up the difference between the cost of attendance and what you were offered in Federal Student Aid.