Federal Direct PLUS Loan
A Federal Direct PLUS Loan is a great way to get money for older students or students who do not qualify for other forms of financial aid. Federal Direct PLUS Loans are available to graduate students and the
parents of undergraduate students. The Federal Direct PLUS Loan are called direct loans because they come straight from the United States Government and do not require a lending institution as a middle man.
Federal Direct PLUS Loan
There are Federal Direct PLUS Loans available on a non needs based basis for students seeking graduate loans . These loans are more specifically known as Grad PLUS Loans and are very similar to Parent PLUS Loans. Federal Direct PLUS Loans for graduates are available at an 8.5% interest rate and in most cases require no cosigner. Through the direct graduate loan program you can borrow the entire cost of yearly tuition minus any additional aid that you may have received. If you get a grant for instance, that amount will be subtracted from your yearly tuition and you will be given what is left over in the form of Federal Direct PLUS Loans.
Federal graduate loans of the direct variety do require the applicant to have a good credit. This differs from standard student loans. You may use a cosigner to help with this issue if your credit is a little shabby. It will be incredibly difficult to obtain a Federal Direct PLUS Loan of any type if your credit report shows that you have defaulted on a previous student loan. If you are granted graduate loans in the form of Federal Direct PLUS Loans you can claim them as a yearly tax deduction. This can help to recoup some of the cost of your education.
Federal Direct Plus LoanS
Parent PLUS Loans
Parent PLUS Loans are another form of Federal Direct PLUS Loans. These loans are available to the parents of undergraduates to help shelter the burden of sending children to college. With the average cost of yearly tuition rising to well over 20K parents of undergraduates often welcome low-interest Federal Direct PLUS Loans in the form of Parent PLUS Loans. Like the Graduate loans offered by the federal government, parents of undergrads may borrow the entire estimated amount of yearly tuition if necessary.
A parent who wishes to apply for Federal Direct PLUS Loans will need to stop by their child’s current or prospective university and pick up a Parent PLUS Loan application form. This form will include a promissory note and application. Good credit is a requirement for a Parent PLUS Loan.
There are two different types of Parent PLUS Loans. A parent may not receive both types of Parent PLUS Loans in the same year. This shouldn’t be a problem since the parent may borrow all they need from either of the available Federal Direct PLUS Loans. Parents who decide to apply for auto debit of their Parent PLUS Loan payment can get a financing charge that is as low as 0.25%. In addition to low interest rate Parent PLUS Loans are tax deductible.