Many parents want their kids to go to college, but no one wants to see their loved ones burdened with massive student loan debt. Tuition expenses have risen consistently over the years, and parents are stepping in to help cover the costs.

How the FAFSA Parent PLUS loan works

To get a Parent PLUS loan, you or your child must fill out the FAFSA. Then, you should contact the school for their individual procedures. Most schools will need you to apply for a Parent PLUS loan through studentaid.gov. Parent Plus loans are available for up to the entire cost of attendance minus any other financial aid obtained by the student. The most important thing to note about the Parent PLUS loan is that the loan is repaid by the parent, not the student.

While proof of income is required for approval of a private loan, it isn’t required for a Parent PLUS loan. Borrowers can’t transfer the Parent PLUS loan balance to a student through the federal student loan program. Also, Parent Plus loans have a few federal projections like deferment and forbearance.

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fafsa parent plus loan explained

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Parent PLUS loans are one of the most expensive federal loan types. For the 2021–2022 school year, they have an interest rate of 6.28 percent plus an origination fee of 4.228 percent. To compare, federal direct undergraduate student loans have an interest rate of 3.73 percent. Over the past seven years, the Parent PLUS loan has increased by 67 percent to $103.6 billion from $62.2 billion compared to a 39 percent increase in undergraduate student loans.

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