A parent PLUS loan, or direct PLUS loan, is a form of federal student aid. In most cases, a parent borrower will take out a PLUS loan once their child reaches their federal student loan limits to cover the remaining costs. A parent PLUS loan is an unsubsidized federal direct loan.
Are Parent loans considered student loans?
Parent PLUS loans are issued to the parents of an undergraduate student. Only the parent bears responsibility for repayment. Parent PLUS loans tend to be high interest loans, with far fewer repayment options than other types of federal student loans.
Is a parent PLUS loan a federal student loan?
Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school. PLUS loans can help pay for education expenses not covered by other financial aid.
Does student loan forgiveness apply to parent PLUS loans?
How to get parent PLUS Public Service Loan Forgiveness. Public Service Loan Forgiveness is available to all federal student loan borrowers, including parent PLUS loan holders, who make 120 qualifying payments while working full time in a government position, or for an eligible nonprofit employers.
Can two parents apply for a parent PLUS loan?
The U.S. Department of Education allows more than one parent to obtain a PLUS Loan for the same child in the same year, and also allows the same parent to obtain multiple PLUS Loans in the same year if the parent has more than one child in college.
What happens if I dont pay my parent PLUS loan?
While your parent PLUS loans are in default, the government can garnish your wages and take your tax refunds and Social Security checks, among other consequences. Defaulted loans also aren’t eligible for different repayment plans, or deferment or forbearance.
Are Parent PLUS loans bad?
Parent PLUS loans have some major flaws. High interest rates and the lack of subsidies can make them very expensive to repay. And repayment options are much narrower than they are for most other types of federal loans.
Can I claim my parent PLUS loan on my taxes?
Good news: As a Parent PLUS borrower, you are eligible to claim the Student Loan Interest Deduction on your taxes.
Do parent PLUS loans affect getting a mortgage?
All three types of loans will show up on the parent’s credit history and affect the parent’s ability to get new credit, such as a new credit card, auto loan or mortgage. … Federal loans do not depend on your credit score, although the Federal PLUS loan bases eligibility on the absence of an adverse credit history.
Who pays parent PLUS loans?
Only the parent borrower is required to pay back a Parent PLUS Loan, as only the parent signed the master promissory note for the Parent PLUS Loan. The student is not responsible for repaying a Parent PLUS Loan.
Can you do income based repayment on parent PLUS loans?
But, Federal Parent PLUS loans are not directly eligible for income-driven repayment plans. Instead, one must consolidate the Federal Parent PLUS loans into a Federal Direct Consolidation loan.