The Ins And Outs Of Finding A Loan For Your Childrens Education
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If you have a child in college, you may be able to benefit from a federal loan program that allows parents to acquire apply for a loan their children’s university education. The Parent Loan for Undergraduate Students (PLUS loan) is a federal loan that functions much like any other student loan, except that this is a loan for parents. These loans are accessible through the government and additionally through banks and other lenders.
Although PLUS loans are a type of student loan, they do not provide all of the same benefits as other student loans. The interest rate on these loans is fixed at 8.5%, which is more than other student loans. Unlike the Stafford and Perkins loans, which are subsidized pending the student is out of university, this loan is not. There is also a 4% fee taken out of each disbursement check.
There is a 60 day period following the last disbursement of the funds from a PLUS loan throughout which no payments need to be made. Payments begin following this two month period, and the loan is required to be paid within ten years. Unlike the Stafford loan, there is no grace period. Nevertheless, parents may take part in a rescheduling program which enables them to capitalize their interest and make money online, and parents who are also going to university themselves, may be able to get a rescheduling.
Similar to other loans, the PLUS loan can be consolidated, but typically only with other PLUS loans. If your children have gotten Stafford or Perkins loans, then the student is liable for paying them back, not the parent. The borrowers are not the same person, so the loans can’t be consolidated. Nevertheless, if the parent has Stafford or Perkins loans from paying for their own university education, those loans may be consolidated with the parent’s PLUS loan. You can save on interest by combining your PLUS loans. There is a limit on consolidations that confines the interest rate to 8.25%. That’s only a quarter of a percent fewer than the fixed rate on the loan, but it’s possible you may be able to get an even better rate.
The PLUS loan for parents is an excellent choice for families who need fast easy cash. If your children are not capable to get adequate financial aid and student loans to cover their entire education, the parent’s PLUS loan can be of assistance. Now don’t forget that repaying the PLUS loan is the parent’s duty, not the child’s.
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