salliemae Federal Parent PLUS loans

Federal Parent PLUS loans

The federally sponsored Parent PLUS loan is a low interest student loan for parents of undergraduate, dependent students. With a Parent PLUS loan, families can fund the entire cost of a child's education (less other financial aid).

Eligibility

• You may apply for a Parent PLUS loan to pay for the higher-education-related expenses of an undergraduate, dependent child. Parents of independent students are not eligible.
• You must be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen.
• A credit check is required.

Features

• Many Sallie Mae lenders offer borrower benefits on Parent PLUS loans that can save you money in repayment.
• Flexible repayment options are available.
• Postpone repayment for up to 60 months including while your dependent child is in school.
• You can manage your account online 24/7.
• You get life-of-loan servicing from Sallie Mae.
• There is no prepayment penalty.
• There are no income or collateral requirements.
• Parent PLUS borrowers may use Sallie Mae's PLUS Success, a free, confidential credit counseling service. Sallie Mae PLUS Success credit specialists work with parents to resolve credit issues so that they may become PLUS eligible. Parents who are not PLUS eligible on the basis of their own credit may obtain a creditworthy endorser.
• Interest may be tax-deductible.
• We have an easy online application and approval process with an instant credit decision.

Loan terms

Loan limit

You may borrow up to the full cost of your child's education less other aid received.

Interest rate

The interest rate for Parent PLUS loans first disbursed on or after July 1, 2006 is fixed at 8.5%.

Fees

There is a 3% origination fee charged by the federal government. Up to a 1% federal default fee is also charged. Some lenders and guarantors who work with Sallie Mae pay all or a portion of the default fee on behalf of Parent PLUS borrowers whose PLUS loans are guaranteed July 1, 2007–June 30, 2008.

Repayment

• Standard repayment: You make both principal and interest payments each month up to a 10-year repayment term. This plan has the lowest total interest cost.
• Graduated repayment: You make reduced payments in the early years of repayment and increased payments thereafter, while still paying off the loans within the maximum 10-year period. With graduated repayment, you have a higher total loan cost than with standard repayment.
• Income-sensitive repayment: Payments are a percentage of your gross income. You must reapply every year for this plan and payments are adjusted annually to reflect changes in income. With income-sensitive repayment, you have a higher total loan cost than with standard repayment.
• Extended repayment: If you have high student loan debt, you may be eligible for up to a 25-year repayment term and the choice of standard or graduated payments to keep payments affordable. With extended repayment, you have a higher total loan cost than with standard repayment.
• Student loan consolidation: You combine your eligible loans into a new loan with a single monthly payment and a fixed interest rate. While student loan consolidation can substantially lower your monthly payments, it will generally result in a higher total loan cost.

Legal

• You are responsible for all interest that accrues on the Parent PLUS loan. Unpaid interest will be capitalized (added to the loan principal) and you will therefore pay interest on a higher amount.
• The first payment is due within 60 days after the Parent PLUS loan is fully disbursed.