A parent may re-apply for a subsequent academic year and if approved, the student will be eligible for a Parent PLUS Loan and not additional unsubsidized loans in the subsequent academic year.
To request an increase in the amount of a previously requested Direct PLUS Loan, complete a Direct PLUS Loan Application by following these steps: Log in with your account username and password (FSA ID). Select PLUS Loans: Grad PLUS and Parent PLUS under the Loans and Grants heading from the top.
The double consolidation loophole is a way of making your Parent PLUS Loans eligible for the generous repayment terms of the SAVE program. You can do this by changing the source of your loan through multiple consolidations, changing it from an ineligible Parent PLUS Loan to an eligible Direct Consolidation Loan.
If your parent is rejected for Parent PLUS loans, then you are eligible to take out federal undergraduate loans as if you were a non-dependent student. IIRC this means you can take out $9500 your freshman year. Ultimately you're capped at $57500. Your school's financial aid officer should be able to help you with that.
Parent PLUS loans can potentially be forgiven after 10 years under specific conditions, such as through the Public Service Loan Forgiveness (PSLF) program after consolidation into a direct consolidation loan. Parent borrowers must enroll in the Income-Contingent Repayment (ICR) plan to qualify for PSLF.
A parent can obtain a PLUS Loan for each child in each school year. You can obtain additional PLUS Loans for any year that you have an eligible child in school.
If you're a parent or graduate student seeking a Direct PLUS Loan, one of the requirements to qualify is that you must not have an adverse credit history. If your application is denied because of an adverse credit history, don't give up. You still have options.
What Are Some Reasons to Avoid PLUS Loans? First, PLUS loans have no automatic grace period. Then there's the fact they aren't eligible for most IDR plans. Then, borrowing too much is easy to do, and finally, they're nearly impossible to get out of, even in bankruptcy.
You can get out of Parent PLUS Loans through forgiveness programs like PSLF or, in rare cases, by discharging the loan in bankruptcy. Otherwise, refinancing or consolidating may help lower your payments, but won't remove your obligation to repay.
Unlike all other federal student loans, there are no explicit borrowing limits for parent PLUS loans. Parents may borrow up to the full cost of attendance, which is determined by the institution, not the government, and includes books, travel and living expenses. There are no ability-to-repay standards for PLUS loans.
If a parent selected the maximum loan amount on the original Parent PLUS Loan application, an increase can be processed through the loan adjustment form.
You must complete a Direct PLUS Application for each year you wish to receive a parent PLUS loan. Complete the Direct PLUS Loan Application.
However, you don't need to meet a minimum credit score to qualify. Instead, the check looks for “adverse credit,” such as bankruptcies, repossessions, wage garnishment, or tax liens in the past five years. But even if you do have adverse credit, you may still be able to get a parent PLUS loan.
The interest rate for Parent PLUS Loans first disbursed on or after July 1, 2024, and before July 1, 2025, is currently 9.08%. This rate is fixed for the life of the loan.
The average Parent PLUS Loan debt is based on Q4 of each year or the most recent data published (as 2022 currently only has Q3). Based on the information from Federal Student Aid, as of 2022, the average Parent PLUS Loan debt is $29,528.
Parent PLUS loans are educational loans, and the borrower can get an income tax deduction. When borrowers review their tax deductions, they can deduct up to $2,500 per year in interest paid on the Parent PLUS loan.
The Bottom Line. Yes, borrowers with Parent PLUS Loans can have their debts forgiven after 10 years (or 120 eligible monthly payments) with the PSLF program.
What happens to my parent's PLUS loan if my parent dies or if I die? Your parent's PLUS loan will be discharged if your parent dies or if you (the student on whose behalf your parent obtained the loan) die.
To be eligible for a Direct PLUS Loan for parents, you must be a biological or adoptive parent (or in some cases a stepparent), not have an adverse credit history, and meet the general eligibility requirements for federal student aid (which the child must meet as well).
You, the parent borrower, are legally responsible for repaying the loan.
Your parent PLUS loan may be discharged if you (not the child) become totally and permanently disabled, die, or (in some cases) file for bankruptcy. Your parent PLUS loan also may be discharged if the student for whom you borrowed dies.
Please note that requests for a Parent PLUS increase can only be completed if the credit check on the original loan is still valid. If the credit check has expired, the parent-borrower will need to complete a new PLUS loan application to receive additional funds.
Parent PLUS loans are made directly to parents for their child's education. Under the current rules, parents cannot transfer these federal loans to a child, and they are solely responsible for paying back the loan.