Parent Loans

"Parent Loans" submitted by SchoolGrantsfor Editorial Team and last updated on Friday 22nd July 2011

Table of Contents

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.

If you are a dependent student, both you and your parents must sign the FAFSA prior to submission. When you apply online you may receive your Student Aid Report (SAR) in as little as five days.

Who receives the loan money—the parent or the student?

Which parent’s financial information should you use on your FAFSA?

It doesn’t matter who claimed you as a tax exemption.