Parents' Responsibility And Plus Loans

The US Department of Education is responsible for the disbursement of Parent Plus loans through its various funding programs. Those students who happen to be US citizens or permanent residents are eligible for the Plus Loans. The Plus loans are specifically designed to serve the needs of undergraduate and dependent students. In order to avail the Plus Loans, enrollment in at least part time courses under a recognized institution is also an essential eligibility criterion of Plus Loans.

The borrowers of Plus Loans really get benefited by large amounts of loans after the collapse of other loans. This loan is also characterized by flexible repayment options and with this feature one would also get entitled to loan consolidation in which one can club up all existing loans into a single loan and pay a single amount as interest. The prepayment penalties also do not exist.

Loans which are disbursed after July, 2006 have a fixed percentage of 8.5 as the APR. A credit check has to be passed by the parents of the dependent student and a maximum fee of 4 % is also included as a term. The borrower has to bear the interests himself as it is not a subsidized loan. There is no grace period and repayment starts 60 days after the loan is received.

It is the parents and not the students who would apply for Plus Loans from the financial aid office. One would be wondering about the maximum amount of loan that can be obtained. The answer is, the amount depends on the cost of attendance of the borrower. One cannot borrow more than the amount estimated as cost of attendance. However, the costs of books, stationeries and other related supplies can be included under the loan amount. But the amount would get reduced if the borrower is enjoying a scholarship. With Plus loans, it has become easier for the parents to carry out their duties of educating their children.