Loans For Parents
For parents of dependent undergraduate students, we offer Federal Parent PLUS loans. Parent PLUS loans can help cover college costs that are not covered with a Stafford loan, including tuition, room and board, books, supplies and other education related expenses such as a computer. Parent PLUS loans are low-cost loans that offer:
- Fixed interest rate of 8.5%
- A 0.25% interest rate discount for auto-debit payments
- No payments for up to 6 months after graduation, upon request
- Flexible repayment options
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Parent PLUS Loan Basics
Parent PLUS Loan Borrowing Limits
You can borrow up to 100% of the estimated cost of your dependent, undergraduate student’s attendance with Parent PLUS Loans. The estimated cost of attendance includes tuition, room and board, books, transportation and other expenses, minus any financial aid awarded to your student.
Parent PLUS Loan Interest Rate
The interest rate for Parent PLUS Loans (as determined by the Federal government) is 8.5% FIXED.
Parent PLUS Loan Fees
Parent PLUS Loan fees (as set by the Federal government ) are:
- 1.0% default fee
- 3.0% origination fee
Parent PLUS Loan Eligibility
To be eligible for Parent PLUS Loans you must:
- Be a natural, step, or adoptive parent of a dependent student
- Be a U.S. citizen or eligible non-citizen with a valid Social Security number
- Meet the requirements of a credit evaluation
To be eligible for a Parent PLUS loan your student must:
Parent PLUS Loan Repayment
Repayment Term
The regular repayment term for Parent PLUS Loans is 10 years with a $50 minimum payment. However, there is no penalty for paying off a Parent PLUS Loan early.
Repayment Begins
Your first Parent PLUS Loan payment is usually due within 60 days after the loan has been fully disbursed. If you are eligible, you may be able to postpone or reduce your monthly payments with deferment or forbearance benefits. If you choose to postpone your Parent PLUS loan payments, interest will still accrue and be added to your loan balance. Therefore, you also have the option to pay interest only during periods of postponed payments.
New! For Parent PLUS loans first disbursed on or after July 1, 2008, you may postpone payments for an additional six months after your student graduates or is no longer enrolled at least half-time. This is similar to the six month "grace period" offered to students who borrow the Federal Stafford Loan. Please note, interest will still accrue on your PLUS loan during the grace period.
Repayment Options
- Standard Repayment: Monthly payments include both principal and interest and are fixed over the life of the loan (a maximum of 10 years). This plan has the highest monthly payment amount, but the lowest total interest cost. Estimate your monthly payments under this plan using the Great Lakes Account Payment Plan Estimator tool.
- Graduated Repayment: This repayment option allows you to have a lower monthly payment for the first few years and then an increased monthly payment thereafter. For example:
- For the first 2 years monthly payments will be interest-only.
- For the next 3 years payments will be slightly higher and include interest and some of the principal.
- For the remaining life of the loan payments will be made on a standard repayment plan.
Estimate your monthly payments under this plan using the Great Lakes Account Payment Plan Estimator tool.
- Income-Sensitive Repayment: Your monthly payment amount will vary each year (up to 5 years) based upon a percentage of your annual income. You must reapply every year and payments are adjusted annually to reflect changes in your income.
- Extended Repayment: If you have an outstanding balance of principal and interest in FFELP loans totaling more than $30,000, then you may qualify to extend your repayment term up to 25 years. Estimate your monthly payments under this plan using the Great Lakes Account Payment Plan Estimator tool.
Applying for a Parent PLUS Loan
The Master Promissory Note (MPN) is your loan application and contract. By signing the MPN, you agree to repay the money you borrow. You may be able to use your initial PLUS Loan MPN to obtain Parent PLUS Loans in subsequent academic years. If your student attends a school that supports this process, you can take out additional loans during all the years your student attends the school without completing another MPN. You will only need to submit your request for the new loan amount. However, if you choose a different lender for a new loan, then you must complete a new MPN.
Credit Requirements
In order to obtain a Parent PLUS loan, you will need to pass a credit evaluation, but there are no income or employment requirements. The credit evaluation does not take into account your credit score, but is rather to verify that you do not have adverse credit history.
Obtaining the Loan Funds
Once you apply and are approved for a Parent PLUS loan, the loan funds are sent directly to your student’s school. The school will apply any funds needed to pay tuition and other school bills to your student's account. The loan is usually not sent in a lump sum, but rather is divided into equal amounts called disbursements throughout each quarter or semester. Generally, a disbursement may not be made prior to 30 days before the beginning of the academic term. The school will give any excess funds to you unless they are authorized to release the funds directly to your student.
How to Apply
At Student Lending Works, we have simplified the application process. Just complete our Parent PLUS Loan Online Application. Once you submit the application, we will verify your information and credit history. When your loan is approved and certified by the school, we will send the funds to your student’s school.
Tax Benefits
The interest you pay on student loans can provide you with a sizeable tax deduction - up to $2,500 per tax return! There are, however, some limits based on your income level. If you are:
Married and filing jointly – Your adjusted gross income must be under $140,000 to get any deduction and must be $110,000 or less to get the full $2,500 deduction.
Filing as single, head of household or qualified widow(er) – Your adjusted gross income must be under $70,000 to get any deduction and must be $55,000 or less to get the full $2,500 deduction.
For more information on calculating your student loan interest deduction and other qualifications you can use IRS Publication 970, Tax Benefits for Education, or consult a tax professional.
Tip: If you pay $600 or more in interest on your Student Lending Works loan, you will get a Student Loan Interest Statement from our servicing partner that will identify the amount you are eligible to deduct on your taxes.
For more on Parent PLUS Loans, check out our Parent PLUS Loan Q&A .
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