Browse Tag: student loans


All You Need To Know About Parent PLUS Loans

Parent loans are essentially requested by an undergraduate student’s parents. These loans are specifically designed to assist such students to effectively meet the financial needs of funding for their college education. As such, they are highly noted for carrying significantly low and fixed interest rates as well as convenient loan limits. These student loans are disbursed by the US department of education, under its direct loan program. This program is commonly referred to as the William .D. Ford direct loan program.

How do parents apply for these loans?

sdahgsahjsTo successfully apply for this kind of student aid, parents are obliged to make contact with their children’s university or college financial aid office. Alternatively, they can opt to apply online at However, before doing this, such parents will need to file a master promissory note, and use the same PIN number that their child utilized to sign in for the free application for federal student aid (FAFSA).

Who is eligible for these student loans?

This type of student aid is available for a dependent undergraduate student’s biological or even adoptive parents. Those parents whose children are independent are barred from accessing these loans. Should an eligible student’s parents be divorced, each of them can be allowed to request for this student aid separately. But they will have to fill in separate master promissory notes. On the other hand, a step parent can also be permitted to apply for this program, on the condition that they are legally married to the said student’s biological parent.

What are the interest rates for student loans obtained through this program?

ashgashgssLike earlier noted, the interest rates that are set for loans obtained through this William .D. Ford direct loan program are fixed and do not alter over the course of the loan. Currently, the US federal government has set an interest rate of 6.84% for the 2015 – 2016 year. This is undoubtedly one of the lowest rates, which is granted to borrowers of unsecured loans that do not necessitate a credit check for approval. This interest is unsubsidized, and it starts accumulating from the day that the loan is disbursed.

Parent PLUS loans are generally issued in two or more installments, with the exception of colleges that have a decreased defaulting rate. Should the borrower fail to meet the interest as it accumulates, it will be added to the loan balance, which increases the loan size. The fees for these loans stand at around 4%, which is deducted in proportion to each loan that is disbursed. Parents can request their children’s college financial aid office to increase the amount that is borrowed to cater for fees up to the annual limit.