Parent student loan, which is also referred to as PLUS loan or parent PLUS loan is a type of student loan that is offered to the parents of students who are enrolled in a graduate or a professional course or in post-secondary institutions.

Taking a parent student loan is a major decision, as it can affect your finances for at least a decade.

Hence, it is crucial to do your research and understand parent student loans completely.

There are certain eligibility requirements to qualify for a parent student loan:

Your need for financial aid will be evaluated on the basis of information you provide on Free Application for Federal Student Aid (FAFSA).

To get a parent PLUS or a parent student loan, the parent should have a good credit score. You can be denied of a parent PLUS loan if you have an adverse credit history due to bankruptcy or other delinquencies.

This goes without saying that you have to be the parent of the dependent college student. This can be your biological or adopted child or stepchild in some cases who is enrolled in a course or college. You should be paying for more than half of their support, living expenses included.

According to federal student aid office, you are entitled to get a parent student loan if your child has college costs that cannot be covered by other financial arrangements such as grants or the child’s own student loan.
Parent student loans will have some federal student loan benefit. For instance, the loan repayment options include:
Deferment or forbearance due to financial hardship or unemployment.

The parent might be entitled to get public service loan forgiveness for any remaining balance post 10 years of on-time payments.

Through the income-contingent repayment plan, the balance amount can be waived off after 25 years.

Just like other loan options, parent student loan also has a few disadvantages. For starters, unlike undergraduate student loans, parent student loans do not defer payment of the loan until 6 months after the student graduates and leaves the school. The repayment of a parent student loan kicks in once the loan is disbursed.

Parent student loans also come at higher costs. They carry higher interest rates and loan fees. The interest rate recorded for the year 2017-18 was around 7 percent with a loan fee of around 4 percent.

Private student loans are more consumer-friendly as they offer terms that are as good as federal student loans. Private parent student loans are offered by private lenders which include banks, credit unions, and financial tech companies.