Can I Take Out Parent PLUS Loans for My Child’s Education?

As a parent, you want the best for your child’s future, and that often includes a college education. If you’re still repaying your own student loans, you might wonder if you can take out a Parent PLUS Loan to help cover your child’s tuition. The good news is that you can, provided you meet the eligibility requirements for federal financial aid.

To qualify for Parent PLUS Loans, you must:

• Show financial need
• Be a U.S. citizen or eligible noncitizen
• Have a Social Security number
• Certify that you are not in default on a federal student loan, do not owe money on a federal student grant, and will not use borrowed funds for non-educational expenses

The student you are borrowing on behalf of must be enrolled or accepted as a regular student in an eligible program and must be enrolled at least half-time. Additionally, the student must maintain satisfactory academic progress.

Parent PLUS Loans and Credit History

Unlike other types of loans, Parent PLUS Loans do not consider debt-to-income ratios, credit scores, or employment status. The primary factor is not having an adverse credit history. According to Federal Student Aid, an adverse credit history includes:

• Having one or more debts totaling over $2,085 that are at least 90 days delinquent, placed in collections, or charged off in the two years before the credit report date
• Having a default determination, bankruptcy discharge, repossession, foreclosure, tax lien, wage garnishment, or write-off of federal student aid debt in the five years before the credit report date

If you have not experienced any of these events, you may still qualify for Parent PLUS Loans even if you are new to credit or rebuilding your credit.

Other Ways to Help Your Child Pay for College

If taking out a Parent PLUS Loan is not an option, there are other ways to support your child’s college education:

• Allow them to live at home and commute to college while you continue to support them with utilities, food, and other needs.
• Encourage them to attend community college for the first two years to save on tuition costs.
• Help them apply for scholarships and grants.
• Encourage them to earn Advanced Placement (AP) credits during high school to reduce the number of college courses they need to take.
• Consider service-oriented options like the military or AmeriCorps, which can help pay for college.
• Assist them in finding a part-time job to help cover some of their college expenses.

It’s also important to have open and honest conversations with your child about your financial situation and what you can afford. Teaching them to live within their means is a valuable lesson that will benefit them in the long run.

The Bottom Line

Before deciding to take out a Parent PLUS Loan, it’s crucial to assess your current financial situation. Start by checking your credit report and monitoring your credit score. This will give you a clear picture of your financial health and help you make an informed decision.

If you’re hesitant to take on more debt, that’s perfectly understandable. There are many ways to support your child’s education without taking out additional loans. By exploring all available options, you can find the best solution for your family’s needs.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team of experts is here to help you navigate your financial journey and find the best solutions for your unique situation.