2024 How Parent PLUS loans are helping families send their kids to college

The loans help parents finance their children’s education, but they carry higher interest rates and financial dangers. This is what parents should know.

As universities begin to send acceptance letters to students, many families around the country are attempting to figure out how to pay for their children’s education. One loan that has been considered over the years is the Parent PLUS loan, which began in 1980 and is now commonly used by Black parents.

Parent PLUS loans are loans that parents can use to assist pay for their dependent undergraduate students’ education. The loan does not limit the amount that families can borrow.


These loans were designed in part to reduce students’ debt burdens, which are felt more severely by women, who take out federal loans at a higher rate than males and account for roughly two-thirds of total student loan debt in the United States.

However, the loans have some drawbacks, including a higher interest rate than student loans and the inherent danger of damaging the parent borrower’s financial health.

According to federal data, as of the fourth quarter of 2023, 3.8 million parents took out this type of loan. Since 2018, the number of families using these loans has climbed by 5.5%. These loans are not eligible for forgiveness under President Joe Biden’s loan repayment scheme.

Here’s everything you should know about Parent PLUS loans.

What are Parent PLUS loans?

Federal Parent PLUS loans, also known as Direct PLUS Loans, were created for higher-income or rich families who required liquidity or could not pay for their children’s education in cash. Parent PLUS Loans might cover the leftover sum after parents have paid out of pocket.

As the expense of education rose over time, parents with lesser incomes came to rely on these loans to afford tuition.

What are the requirements for the loan?

To be eligible for a Parent PLUS loan, parents must pass a credit check. They must also be a US citizen or a qualified non-citizen.

Another requirement is that parents sign a promissory note, which is a legal document that declares that they, not the student, commit to repay the debt and interest accumulated.

The deadline for Parent PLUS loan applications varies by institution, but the federal deadline is June 30 of each award year. You can check with your child’s school to see when the deadline is.

Are there alternatives to the loan if a parent has an adverse credit history?

If parents have a poor credit history, the US Department of Education permits them to find a credit-worthy cosigner who will repay the loan if the parent is unable to do so. The borrower can also provide additional factors for approval.

How to apply for parent PLUS loan MSU?

Go to StudentAid.gov. The parent will need to check in using their FSA ID or create one if necessary. Fill out the Direct PLUS Loan application for parents. Complete the PLUS Loan Master Promissory Note (MPN) for Parents.

Does Parent PLUS loan affect credit score?

Parents who apply for a federal Parent PLUS loan do so using their name and Social Security number. The loan is mostly based on their credit profile. Any payback activity, whether timely or late, will have an impact on their credit score.

Can parent PLUS loan be reduced?

No, you can’t directly reduce the total amount you’ve borrowed on a Parent PLUS loan. However, there are strategies to effectively lower your monthly payments or the total interest paid over time:

  • Income-Driven Repayment Plans
  • Refinance with a Private Lender
  • Prepayment
  • Interest Rate Reduction with Automatic Debit
  • Loan Forgiveness Programs

What is the parent PLUS loan in PA?

The Parent PLUS Loan is a federal student loan for the parents of dependent undergraduate students. The Parent PLUS borrowing has a fixed rate of 8.05% for the 2023-24 school year and flexible borrowing limits. A parent’s credit history must be clean in order to be qualified.

How do I defer my parent PLUS loan?

You must request individual deferments for each loan period from your federal loan servicer. Upon disbursement, your loan servicer will send you repayment and deferment information, and you may be required to produce a copy of your student’s enrollment verification as well as the in-school deferment form.

Is IBR available for parent PLUS loans?

Federal Parent PLUS loans are often not eligible for income-driven repayment plans such as income-contingent repayment (ICR), income-based repayment (IBR), pay-as-you-earn repayment (PAYER), and revised-pay-as-you-earn repayment (REPAYER).

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