Federal College Plus Loans For Parents & Students

By Guest Writer Peter Kaestner:

The government of the United States has made it possible for students at the undergraduate and graduate level to be able to pursue tertiary education, thanks to PLUS loans and graduate PLUS loans. These gradplus loans have been made available to help parents with good credit ratings borrow up to the cost of attendance for their undergraduate kids. In the case of graduate loans, students wishing to pursue graduate studies can also gain access to funding to accomplish that. While there are conditions for acquiring either of these loans, meeting the criteria is very straightforward and has allowed many kids the opportunity to gain tertiary qualification.

For Any Expenses

PLUS loans can be used for just about any undergraduate related expense, including tuition, books, supplies and housing. The main factor is that financial aid from other sources would have to be deducted from the total amount needed, after which the PLUS loan is issued. What most people like about the PLUS loan is the fact that there are flexible re-payment terms, as well as the option to defer payments. This simply means that the parents can wait until their child has finished his or her studies before starting to repay the loan.

Discount Rate For Parents

There is also the benefit of a 0.25% interest rate discount for parents who enroll in an auto debit facility at their financial institution. Auto debit simply means that the bank would automatically deduct the loan amount each month from the bank account. Just enrolling in this program guarantees a 0.25% discount on the interest rate. And of course, these loans have a fixed interest rate of 8.5%, so parents do not have to worry about being surprised with increased interest rates.

Available To Students & Parents

In the case of student PLUS loans, these are available for graduate students as opposed to their parents. The students have the option to borrow an amount for books, tuition, housing and supplies. This loan along with the PLUS loan is a non-need based loan, which means you do not have to prove your need to be able to acquire this loan. All you simply need to do is ensure that your credit ratings are good enough, and the loan will be made available.

Consolidation Options

For both loans, there is the option to consolidate. Consolidating PLUS loans are really a debt management tool that enables you to combine your federal loans into one single loan. The advantage of this is that recordkeeping is simple and you just have to make one payment per month. Usually, consolidating federal loans allows you to have lower monthly payments by as much as 53%.  Plus loans enable students and parents to reapply for student loans in an efficient manner.

PLUS loans are very effective at helping young professionals to acquire the knowledge and qualification they need to be able to make it out there in the work world. If anyone you know is interested in tertiary education, but they feel they do not have the funding required to achieve it, you should advise them about these loan options so they can pursue their dreams.