What causes an adverse credit history: If either parent later qualifies for a Parent PLUS Loan, the student’s loan limits return to the dependent student level.(Loan amounts already received under the additional Direct Unsubsidized Loan limits will not count against the lower loan limits.) The interest rates on Parent PLUS Loans are fixed and do not change over the life of the loan.Parent PLUS Loans can also be deferred while the parent borrower is enrolled on at least a half-time basis in an eligible program and during the 6-month grace period.However, interest continues to accrue during these deferment periods.To be eligible, a parent can’t have an adverse credit history.
The borrower of a Parent PLUS Loan must not have an adverse credit history.The interest rates are based on the 10-year Treasury Note (determined each year by the final auction prior to June 1) plus a fix margin (see table).The interest on a Parent PLUS Loan starts to add up (accrue) from the date the loan is first disbursed. Borrowers can ask the college financial aid office to increase the amount borrowed to cover the fees, up to the annual loan limit.Parent PLUS Loans are eligible for public service loan forgiveness.A parent’s Parent PLUS Loans cannot be consolidated with the student’s federal student loans, since the borrowers are different.
Borrowing Direct Loans before Parent PLUS Loans will save the family money.