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Parental Student Loans
Parents sending a child off to university or college often face the intimidating and frightening issue of paying for his or her education. Most college students are unable to pay for even a portion of their education and many times, their parents do not have the necessary finances available to pay for this. Luckily, there are several funding options available to relieve much of the financial stress from both the parents and the students. The federal government has a PLUS or Parent Loan for Undergraduate Students program which is a parental student loan. There are also alternative parental loans available from numerous other agencies to help parents with the expense of sending their child or in some cases, children to university or college. For further information on parental student loans, two very good sites are StudentLoans.com and ParentPlusLoan.com.
The PLUS loan is not only an option for parents but also an option open to grandparents that want to help pay for their grandchild or grandchildren's university or college education but do not have the finances available to pay this out of pocket. Instead, parents and/or grandparents can apply for a Federal PLUS loan with options such as a flexible payment plan along with low interest rates. They can apply this loan towards college or university related expenses including school materials and tuition. Not considered the students financial responsibility, the PLUS loan does not have a deferment period, which means that repayment by the parents and/or grandparents starts immediately upon receiving the loan, just the same as most types of traditional loans. Because it is a federally funded loan, the PLUS loan has a long-term repayment period and very low interest rates. To be eligible for a PLUS loan, the student must be a dependent and parents or grandparents must have a satisfactory credit record. Unlike a Perkins loan or Stafford loan, they do not base PLUS loans on financial need. There are PLUS loan consolidation programs that offer fixed interest rates that are extremely low. Parents that refinance and consolidate their PLUS loans find the savings are substantial and often work out to at least half the amount they typically spend on monthly PLUS repayments.
Several organizations and private banks offer parental student loans with terms very much like the PLUS loan. Some act as a liaison and alter their program to offer good interest rates and additional benefits. Be sure when shopping around for a parental student loan that the loan programs have specialized student rates so you do not end up paying the high, standard personal loan interest rates. It may be hard for some parents to obtain alternative loans if they have poor credit ratings, often making even PLUS loans unavailable for them. Federal governmental loans have more relaxed credit requirements because their primary objective is to aid as many students in attending college as possible, to improve society, whereas with personal loans such as bank loans, their main purpose is to make a profit.
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