Student Loans for Parents With a Good Credit History

By: Devora Witts

Parents have the possibility of helping their children out economically through college. Direct PLUS Loans are granted to parents with a good credit history. Learn how you can apply if your child is beginning their college hunt.

Mom Was Right When She Said Things Will Always Work Out

Remember how mom used to pack up your peanut butter and jelly sandwiches for school and dad used to give you a lift? Now they have the possibility of making your 4 year ride through college a lot smoother. Parents can apply for your college tuition by submitting a Direct Plus Loan application and meeting the requirements established by the loan and your school.

Mom And Dad's Promissory Note

Just because they are parents it does not mean approval is immediate. There are rigorous statutes that must be completed from the beginning to the end. If you are an undergraduate student looking to apply for college and your parents do not have improper credentials they can apply foe a Direct Plus Loan or a FFEL Loan by submitting an application and signing a promissory note obtained at your school's financial aid directory. Both loans cannot be applied for the same student consecutively.

The First Principles Of Mom And Dad's Lullabies

At first, parents have to undergo a credit check for state eligibility. Then they have to find a lender and contact the Federal Student Aid Information Center for additional information. The amount of money they can generally borrow is that not covered with other forms of financial assistance. Let's assume your cost of attendance which includes room, board, books, transportation and other expenses totals $7,000.00 and you receive $4,000.00 from state aid, your parents can borrow the rest of the tuition fee but not exceed $3,000.00. Once the loan is granted the institution receives the funds and applies it to your tuition. The loan is divided into two installments and whatever is not used during the semester or semesters the loan was applied for will go into your account for educational purposes only.

Premiums And Termination

Interest rates on loans can be altered throughout the period they are being borrowed. Parents will be notified of this and the charges will be made when the first amount is issued until loan is entirely repaid. There is also a fee parents must pay to apply for a PLUS Loan. PLUS Loan requires repayment of the loan to begin 2 months after the loan is expended. Interest begins to tag along immediately once you started outlining the first chapters of your Linguistics class. Under certain circumstances, loan repayment can be adjourned but not permitted to go into default. If this was to happen, your parent's credit could be permanently harmed as well as your chances of continuing your education in the future. Cancellation is not possible just because you have suddenly realized you do not like your school or want to change your major again for the 50th time. Cancellation is possible when you cannot complete your credits because the institution decided to shut down for example. Parents who have a Direct PLUS Loan should contact the Direct Loan Servicing Center for additional information about loan cancellation in the event of illness or sudden death.

Combining Loans

PLUS Loans can be combined with a consolidation loan to simplify repayment schedules into one monthly payment. Interest rates can be lower and the repayment period can be shortened. Your FFEL or Direct Consolidation Loan can be acquired during your grace period. No credit verification is necessary to apply for a FFEL Plus Consolidation Loan. In order to consolidate you must also have another loan such as Federal Perkins Loan covering tuition fees.

Do The Homework With Your Parents

Take the time to research with your parents all the possibilities, advantages, disadvantages and obligations there are facing Parent Loans. There are responsibilities as a student that you must obey and rights you are entitled to. Make sure you do your ABCs and get all the necessary information about repayments, cancellation, interests and loan deferments. Your parents taught you how to take your first steps, now they are ready to get you on your first journey.

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