Parent Plus Loans: Frequently Asked Questions

New federal rules mean rates could change each year for new loans.

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Back to top What happens if I get rejected for a PLUS?


Children of parents who have been rejected for a PLUS loan are allowed to borrow more from the Stafford program.
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Are PLUS loan payments tax deductible?


It depends on your income. Generally not for two-parent families with incomes above $155,000.
Back to top When do I have to start repaying my PLUS loan?


For all PLUS loans made after July 1, 2008, borrowers can defer payments until after the student has left college. But beware, the interest is quietly building up during that time.
Back to top What happens if I lose my job or get into other financial trouble?


You can call the Department of Education and ask to apply for forbearance, which allows you to skip some payments. Interest continues to accrue during forbearance, so you'll owe a lot more when you start repaying again.
Back to top What are the advantages of a PLUS loan?


While interest rates on new PLUS loans can vary annually, once the loan is issued the rate is dixed for the duration, so your payments won't rise if interest rates rise. They also offer free insurance, so the debt will be canceled if the parent or the student dies or becomes disabled. PLUS borrowers can also get their payments deferred if they get into financial trouble.
Back to top What are the downsides of PLUS loans?


Unlike credit card debt and mortgages, which can be canceled if you file for bankruptcy, education loans of all types must be paid. Most bankruptcy courts will not cancel them unless your situation is extremely dire.
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