A College Loan Option – PLUS Loans

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With a college degree becoming increasingly important each day, higher percentages of high school students are attending college and those who do not have a degree are heading back to school to work on one. Many students’ first concern is getting into the college they want to go to; the one with their desired major, the one with the best athletics, or even the one with the best campus. However, many students don’t think of another factor – the increasing cost of college.Scholarships, grants, and loans are essentially the only options for families who don’t have the funds saved up. One important option is the PLUS loan, which stands for “Parental Loans for Undergraduate Students.” Your parents can apply for this loan if you are enrolled as at least a half-time student and you are a dependent, meaning you are under 24 years old, have no dependents yourself, not married, a veteran, a graduate, professional degree student, or a ward of the court. It is important to remember that your parents must have good credit history to be accepted.Another important aspect of the PLUS Loan is you must demonstrate need for financial aid. If your parents are making $100,000+ per year, chances are you won’t be approved.The maximum amount you can receive from the loan is your total costs less any other financial aid you are receiving.Remember, the PLUS Loan is still a loan; there is an interest rate. The PLUS loan has a fixed interest rate of 7.9%. There are discounts in the interest rate under the Service Members Civil Relief Act. Also, the PLUS Loan can usually be repaid within 10-25 years, although it varies among schools.Keep in mind the PLUS Loan is for your parents, not you. It is run through your parents and it is their money. However, it would be nice if you would help them pay it back!View some additional information on Student Loans.