Every year, more and more students are choosing to go back to school, and every year, many students struggle to find ways to pay for their college education. A PLUS Student Loan is for graduate students or parents of undergraduate students to help them finance education.

Who is eligible for PLUS Loans?

In order to be eligible, you must be either a

• Graduate Student who is enrolled at least half time in a graduate or professional program, -or-

• Parent of Undergraduate Student who is enrolled at least half time in qualifying school

In order to be granted this loan, you must fill out the Free Application For Federal Student Aid (FAFSA).

Why get a PLUS student loan?

There are many different reasons that taking out a PLUS loan is a good way to finance your education.

• Fixed Interest Rate of 7.9%- Having a fixed interest rate is a big draw for some individuals.

• Federal Loan Forgiveness Programs– With a federal loan, there are always opportunities for those who work in the public service sector to have parts of their loan forgiven or paid for. Learn more about loan forgiveness programs – here

• Can take out as much as you need to fill the cap to pay for your education- If you are eligible for this loan, you can take out as much money as you need in order to pay for your school bill.

• Parents can defer payments until their student is enrolled less than half time at an accredited University– This is different that what many loans that parents take out in order to help finance their child’s education. Normally they would have a short deferment period or not deferment period at all.

Drawbacks of a PLUS Student Loan

While there are definitely benefits to taking out a PLUS student loan, there are a few drawbacks that should be considered before signing off on a PLUS student loan.

• Higher Interest rate than other Federal Loans- With an interest rate of 7.9%, the PLUS loan has the highest interest rate. This means you should exhaust other federal loan options before taking out any money with a PLUS student loan

• 4% Disbursement Fee- Disbursement fees are fees charged by the lender when the loan is disbursed. Other Federal Loan programs and many private loan programs do not have disbursement fees.

• Unsubsidized- This means that the interest starts adding up on the loan immediately after it is disbursed. Some federal loans are subsidized, so make sure you look into those loans before taking out the PLUS student loan, especially with the interest rate of a PLUS loan being twice the amount of the interest rate for a Federal Subsidized Loan.

• Good Credit History Required- In order to qualify for this loan, you must have a good credit history. This is different than other federal student loans as the PLUS loan is the only Federal Loan requiring a positive credit history.  Check your credit score for free.