What is a PLUS Loan?

A PLUS loan is a financial aid loan available to parents of students who are in college. These loans provide money for college without using the student's credit. In order to qualify for a PLUS loan, parents must have good credit. When the credit is satisfactory, the parent may be able to borrow up to the complete cost of their child's undergraduate education. These loans have flexible repayment terms, and are eligible for deferment if an economic hardship is proven. These are based on the FAFSA estimated family contribution amount. The interest is fixed, and is usually tax deductible. These are federal loans which must be approved by the college or university the student is attending. Filing the FAFSA is one way to ensure the school will certify the loan. If one is not on file, parents risk the school refusing to certify the loan, therefore not allowing to be used to pay tuition expenses.

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