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There are a few steps parent borrowers might want to take before getting started on the Parent PLUS application.
Make sure you meet the following criteria before getting started:
You’re ineligible for a Parent PLUS Loan if your child is over 23, married, participates or participated in active military duty, has children that are financially dependent on them, was an emancipated minor, was homeless or is at risk of being homeless.
You still might be able to qualify for a student loan if you have negative marks on your credit report, such as defaults or delinquencies. However, your application requires a few more steps.
Sit down and complete the FAFSA with your child, since the application requires information about your personal finances. You’re both required to create a Federal Student Aid (FSA) ID — save this for your Parent PLUS application. You can do this before or after your child has been accepted to school by using our step-by-step guide to filling out the FASFA.
Your child will get a summary of the federal aid they’re eligible to receive after the DoE processes the application. This includes federal grants, work-study and lower interest Direct Subsidized and Unsubsidized Loans. If your child can cover all of those costs with federal aid on their own, there’s no reason to apply for a Parent PLUS Loan, which is more expensive and less flexible.
If you still need to cover part of the cost of tuition, figure out how much you’re eligible to borrow. Parent PLUS borrowers can use the following formula:
Cost of attendance (COA) – financial aid award = Maximum Parent PLUS Loan
If you’ve already received a financial aid packet from your child’s school, then you should know both of these numbers. Otherwise, contact the financial aid office to get a more accurate estimate of your child’s expenses.
If you have strong credit and a low debt-to-income ratio, there’s a chance you’ll find a better deal by cosigning a student loan for your child than getting a PLUS Loan. With interest rates fixed at 5.3% , a loan fee of 4.236% and few repayment options, you may be able to qualify for even lower rates elsewhere.
Many private loan providers allow your child to apply for cosigner release after making a few years of repayments and building their credit. If you want to move a Parent PLUS Loan to your child’s name, you’ll have to refinance.
Once you’ve made sure you’re eligible, know how much you need to borrow and weighed other options, you’re ready to request an application from your school.
While most parents have to complete the DoE’s Direct PLUS Loan Application for Parents, some schools might have additional forms or information for you to fill out.
Follow these steps to complete the application for a Parent PLUS Loan. Typically, it only takes 20 minutes to complete if you have the following details on hand:
Follow the link you received from the financial aid office of your child’s school or visit the application directly.
Remember that FSA ID you created when you filled out the FAFSA with your child? You also need it to access the Parent PLUS application. You can request to change your username or password by clicking Log In and then Forgot Username or Password?
Read the introduction explaining how the Direct PLUS Loan application works before providing basic information:
Complete the following section with information about your child and when you’d like to start repayments. Select your child’s name from the dropdown list and verify their personal information:
Read Items 8 and 9 carefully: This is where you have the chance to request Parent PLUS deferment for while your child’s in school and during the six months after they graduate. You might want to check out our guide to Parent PLUS Loans to learn the risks of deferring your loan (hint: you’ll end up paying more).
This section involves verifying and adding to the personal information you already submitted when completing the FAFSA. If you notice an error in the prefilled fields, you likely won’t be able to fix it on the application. Save your application and contact the school’s financial aid department.
Items 27 and 28 might already be completed if you’ve provided this information on the FAFSA. In that case, double-check to make sure everything is accurate.
For Item 29, read the following notices:
After reviewing these sections, check the boxes to:
After the certifications and authorizations, click Continue to submit the application and start the credit check. After the check is complete, you should receive an email with one of the following messages:
You’re eligible for a Parent PLUS Loan. All you have to do is sign the Master Promissory Note (MPN).
You need to take extra steps if you still want a Parent PLUS Loan. At this point, you have several options:
After submitting your application, the school’s financial aid office should reach out to you to sign the Master Promissory Note (MPN), where you agree to the terms and conditions of the loan. If you have an endorser, they’ll also have to sign the MPN.
When you receive the MPN, review or complete the borrower information and details about your child. You’re required to add the names and contact information of two references you’ve known for at least three years who don’t live with you and aren’t the student.
Review the information about how the Parent PLUS Loan works before signing and dating the MPN. If you completed it online, you can submit it online. Otherwise, follow the school’s instructions on where to send it.
Applying for a Parent PLUS Loan takes several steps beyond simply filling out the FAFSA. There’s a separate application you have to complete, and you might have to submit multiple documents if you have a negative mark on your credit report.
Not sure a Parent PLUS Loan is right for you? Explore other ways to pay for school with our guide to student loans.
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