Plus Student Loans

The federal government offers two types of Plus Student loans to assist students with college expenses. One type of Plus Student loan offers parents the opportunity to directly borrow college funds for their dependent children and the latter type of Plus Student loan is called a Graduate Plus loan which is directly offered to graduate and professional students. Plus Student loans are a great way for mom and dad to assist their children in paying for college. Plus Student loans are federally insured loans designed for parents to help their children in making the dream of attending college a reality.

One of the saddest feelings for any parent is the thought of having to tell their children that there is not enough or any money at all to pay for higher education expenses. Plus Student loans covers education expenses such as tuition, mandatory school fees, books, housing, etc. If you are like many Americans who are strapped for large sums of cash or maybe you had to dip into your child’s college savings fund to pay basic living expenses as a result of today’s economy, then you can breathe easier knowing that you can still help your child obtain the American dream of a college education.

Plus Student loans do have credit requirement for parents but they are reasonable. A credit check will be completed for the parent taking out the Plus Student loan. As long as parents are free of current bankruptcies (less than five years), wage garnishments, tax liens, foreclosures, repossessions, late payments of 90 days or more on any debt and no other derogatory credit blemishes, qualifying should be a breeze. Once parents pass the credit qualifiers of a Plus Student loan, they may borrow the amount sufficient to cover college expenses that were not covered by any other forms of financial aid that the student may have received. If there are any funds left over from the Plus Student loan, parents will be sent a check in the mail or they may give the school permission to discharge the remaining balance to the students account for future school expenses.

Although the Plus Student loan program is a great financial benefit to many families, it is crucial that parents are aware of the legal and credit ramification that is involved. Plus Student loans are signed by the parents making them legally responsible for repayment. In essence, the Plus Student loan belongs to the parent and not the child. In addition, the Plus Student loan at no time is transferrable to the student. If mom or dad has a financial setback and are unable to make payments or timely payments, those actions will have a direct negative impact on the parent’s credit report and no bearing on the child’s credit rating. However, the program does offer assistance for those parents who due to financial hardships are unable to make their set payments. Struggling parents can receive a reduction in their monthly payments or have their loans deferred until their monetary situation improves or they reach the maximum time allotted for their deferment.

Parents should also be aware that fees and interest are charged on Plus Student loans . Today the fee for taking out a Plus Student loan is four percent, which is charged after every loan disbursement. The interest on a Plus Student loan is charged the moment the loan is disbursed up until it is paid in full. Another component of the plus student loan is the Graduate Plus loan. This type of Plus Loan is taken out by a graduate or professional degree student. Like the Plus Student loan, this is also a credit based loan. Student must pass a credit check.

Both the Plus student loans and Graduate Plus loan offer an immediate solution to paying for college and are advantageous to many students and their families.