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Plus Loans

You've probably looked into every form of financial aid available for your college bills and are wondering what some of these options really are. You keep hearing all of these acronyms and terms: FAFSA, FFELP, Stafford, Perkins, and PLUS loans. This last one seems to be promising, but you'd like to first understand just exactly what PLUS loans are and how they can help you pay for your college education.

The Parent Loan for Undergraduate Students, or PLUS for short, is an option open to parents or grandparents who want to help their college bound child or grandchild pay for a higher education and cannot afford to do so out of pocket. Instead, they can apply for this Federal Loan program that has options for low interest and flexible payment plans. This type of loan can be applied to tuition, materials, and any other college related expenses that would otherwise become a problem.

So, how can individuals apply for this loan and the incredible financial aid it offers? First, let's explore eligibility of lenders. Parents, grandparents, and legal guardians can all apply for PLUS loans, as long as the student is still considered a dependent. A good credit record must be proven, though the requirements for such credit are a lot more lenient than they would be for a standard loan. Unlike the Stafford and Perkins loan options, PLUS loans are not based on need.

Repayment of PLUS loans is set to begin about two to three months after the loan is awarded. Expect penalties for late and/or missed payments. The major advantage of a PLUS loan is that it will have a low interest rate, allowing guardians of dependents to pay for school without incurring the high interest rates involved in taking out second mortgages or getting a home equity loan.

For those who wish to continue beyond undergraduate studies, there are also Graduate PLUS loans, which are available to cover the entire cost of college but are provided directly to graduate students without necessity of a guardian or cosigner for most instances. Again, there is no requirement of financial hardship, and interest rates offered are dependent upon the applicant's credit history.

Paying for school is not easy, but we are here to help. OEDb's student finance section will help you find the money you need to pay your tuition and other college expenses. We cover scholarships, college grants, and student loans. Scholarships and grants are both forms of "free money", meaning they don't need to be paid back. Scholarships are typically awarded by businesses or individuals, with the money being earmarked specifically for tuition. They can be awarded based on a student's location or by religious affiliation, such as Catholicism or Islam. Grants are typically awarded by governments or non-profit organizations and the money often can be applied to several different expenses a student may incur, not solely tuition. They can be awarded based on location or ethnicity, for instance African American or Hispanic. Loans are not considered "free money", because unlike scholarships and grants, they do need to be paid back after graduation. Common federal loans include Perkins and Stafford. Loans are also available by location.