The price tag of a college education has increased year after year, and if you’re like most parents you may be anxious about how to foot the bill. As you may know, Parent PLUS loans are a popular way many folks finance their kids’ tuition.
PLUS loans generally carry a lower interest rate than personal loans because they are offered by the federal government. And while certain criteria are necessary for all loans, such as a strong credit score, there are other qualifications Parent PLUS loans require.
Must Be an Adoptive Parent or Stepparent
Borrowers must be the biological or adoptive parent of the student in order to secure financing. Stepparents may also obtain a PLUS loan if they were married to a biological or adoptive parent at the time the application was submitted.
Student Must Be a Dependent
You may not take out a PLUS loan for a child who is not considered a dependent by the government’s standards. This means your child must be under 24, unmarried and have no dependents at the time of matriculating. Additionally, your son or daughter must be enrolled in classes at least part-time.
Must Have Good Credit Standing
The government will check your credit score to make sure you are a trustworthy candidate that is unlikely to default on your loans. Any delinquencies, judgments, bankruptcies or other negative details on your credit report may jeopardize your loan eligibility.
Other Loans in Default
You may take out a PLUS loan while still in the repayment process for other federal education loans. However, defaulting on any existing federal loans will negate your eligibility for a PLUS loan, so make sure all of your education balances are up to date.
Parent PLUS loans are an effective way to help finance your child’s education. Before you waste time applying, make sure you meet the eligibility and credit score requirements.