"Parent Loans" submitted by SchoolGrantsfor Editorial Team and last updated on Friday 22nd July 2011
Parents may borrow up to the cost of attendance at the college or university that their child attends. However, the exact amount a parent may borrow is reduced by the amount of other financial aid the student has received. PLUS loans have a variable interest rate that is reset every year on July 1. The rate is equal to the 91-day T-bill rate plus 3.1 percent, and may not exceed 9 percent. Interest is charged from the day the loan is disbursed and repayment begins within 60 days of disbursement. As with student loans, parents have the option to select standard, extended, or graduated repayment options.
Consolidation Loans (Direct or FFEL) allow student or parent borrowers to combine multiple federal education loans into one loan with one monthly payment.
If you’re both a parent and a student, you may be eligible for cash aid and help with child care, transportation and job or training expenses through your local community college. Contact your county social services office for more information if your child’s other parent is deceased or absent from the home, or if you or your spouse is physically or mentally disabled, unemployed or working fewer than 100 hours a month.
Who receives the loan money—the parent or the student?
- The school will first apply the PLUS Loan funds to the student’s school account to pay for tuition, fees, room and board and other school charges.
- If any loan funds remain, they will be sent to the parent borrower, unless the parent authorizes the school to hold the funds or release them to the student.
- Any remaining loan funds must be used for your education expenses.
Which parent’s financial information should you use on your FAFSA?
It doesn’t matter who claimed you as a tax exemption.
- For divorced or separated parents, give answers for the parent you lived with more during the past 12 months. (If you didn’t live with one parent more than the other, then answer for the parent who provided more financial support during the past 12 months.)
- If your parent is widowed or single, answer the questions about only that parent.
- If your parent has remarried as of the day you complete the FAFSA, answer the questions about that parent and the person your parent married (your stepparent).
- If you don’t know where your parents are or if you left home due to irreconcilable differences, let your high school counselor or college financial aid office know.
- For the FAFSA, the following people are not your parents unless they’ve adopted you: ? grandparents ? foster parents ? legal guardians ? older brothers or sisters(For the FAFSA’s question about education level, answer for your biological or adoptive parents.)