what is a parent plus loan

A Parent PLUS loan is a type of federal student loan that parents of dependent undergraduate students can use to help pay for college or career school. The loan is made to the parent or legal guardian of a dependent undergraduate student to help cover the cost of the students education. The loan application is based on the borrowers credit history, and no loan officer will look at the borrowers income or other debt. The interest rate for Parent PLUS loans is generally higher than the rate for a private student loan and potentially higher than the rate on other possible sources of financing. The loan allows parents to borrow up to the cost of the childs attendance each year, minus any financial assistance that has been awarded, with no limit on the amount borrowed. However, the loan comes with an origination fee, and repayments start immediately. While there are many benefits to Parent PLUS loans, they might not be the best option for everyone, and parents should consider other financing options before taking out a Parent PLUS loan.