What is a PLUS College Loan?

Parent Loans for Undergraduate Students

Putting kids through college is expensive these days. If you are a parent of a student that is attending college or will be attending in the future, getting all the information about how to finance that education is important.

Remember that a college education is a great investment for their future and worth every penny!

As part of a series of informative articles on student loans and how to deal with student loan debt and possible student loan consolidation in the future, we will examine the various loans available.

PLUS loans are loans that are made to the parents of students attending college. The PLUS loan differs from a Stafford loan or a Perkins loan, because its a loan made specifically by the parents of the college student as opposed to being a loan to the students themselves.

To be eligible for a PLUS loan, the parent of the student must be the biological parent, stepparent or adoptive parent at the time of making the loan. The college must be a college that participates in direct loan programs and the student must also be enrolled at least half-time.

To qualify, the student must be considered a dependent, which will mean they have to have no children of their own, they aren't married and are under the age of 24 years old. The student and parents usually have to be U.S citizens with good credit history.

One of the advantages of a PLUS loan, is that it is potentially eligible to be incorporated into a direct consolidation loan, in the future. A direct consolidation loan is a way to consolidate all of student loan debt into one easier to manage loan, along with more deferment options and the ease of having just one monthly payment.

One of that major differences between a PLUS loan and Stafford or Perkins loans, is that the repayment of a PLUS loan begins as soon as the loan is made or beginning of the actual disbursement of the loan.