How do I apply for a federal Parent PLUS Loan?
Applying for a federal Parent PLUS Loan can be a crucial step for many parents who are looking to finance their child’s education. This loan is designed to help parents pay for their dependent child’s education at a postsecondary institution. Here’s a step-by-step guide on how to apply for a federal Parent PLUS Loan.
1. Determine Eligibility: Before you start the application process, ensure that you meet the eligibility criteria. You must be the biological, adoptive, or stepparent of a dependent student who is enrolled at least half-time in an eligible program at a participating school. Additionally, you must not have an adverse credit history, which is defined as a credit report with one or more of the following: an account that is currently in collections, a charge-off, a bankruptcy discharge, or a default determination.
2. Complete the FAFSA: The Free Application for Federal Student Aid (FAFSA) is the first step in the financial aid process. You can complete the FAFSA online at fafsa.gov. Be sure to list your child’s school on the FAFSA, as the school will use this information to determine your eligibility for a Parent PLUS Loan.
3. Review the Financial Aid Offer: Once your child’s school receives the FAFSA information, they will review it and determine the financial aid package, which may include a Parent PLUS Loan. Review the offer carefully and ensure that the loan amount meets your needs.
4. Apply for the Parent PLUS Loan: If you decide to apply for a Parent PLUS Loan, you will need to complete the Master Promissory Note (MPN) and the loan application. The MPN is a legal document in which you agree to repay the loan, and it can be used for multiple loans over the life of the loan program. You can complete the MPN online at studentloans.gov.
5. Complete a Credit Check: As part of the application process, the Department of Education will conduct a credit check to determine if you have an adverse credit history. If you have an adverse credit history, you may still be able to obtain a Parent PLUS Loan, but you may need to obtain an endorser or co-signer or document extenuating circumstances.
6. Accept the Loan: After you complete the MPN and the credit check, you will need to accept the loan amount offered. This can be done online through the studentloans.gov website.
7. Disburse the Funds: Once the loan is accepted, the funds will be disbursed directly to your child’s school. The school will then apply the funds to your child’s tuition and fees, and any remaining funds will be sent to you.
Remember that while a Parent PLUS Loan can be a valuable resource for financing your child’s education, it’s important to borrow responsibly and consider the long-term financial implications. Always compare the terms and conditions of the loan with other financial options and ensure that you can afford the monthly payments once the loan enters repayment.
