FEDERAL PLUS LOAN: Obtaining Higher Credit

2007-03-08 10:33:40

( Financial )



With the number of people requiring education financial aid going up annually, the federal government launched an education funding program to meet this rising need. Federal plus loan is among the federally-guarded education financial aids available.

Any parent of dependent undergraduate student or graduate student is eligible for federal plus loans. However, while people from any income level are acceptable, a worthy credit history is needed. A federal direct loan servicer will be conducting a credit-worthiness evaluation to determine an applicant’s credit history. A good credit history pertains to not being delinquent for ninety days or more on any financial obligation or having any credit report showing foreclosure or repossession of any property, default or discharge, tax lien, or wage garnishment during the past five years prior to the report.

Under federal plus loan, a parent can loan the full amount needed to complete the financial requirement for a child’s college education including tuition fees, room and board, as well as other expenses after deducting other education financial aids awarded. Plus loans are also available to graduate students.

Federal plus loan offers low interest rates that vary annually with long-term repayment options. The interest for the loan is charged the moment the first loan disbursement is released until the loan is fully paid. Federal plus loans require no collateral and no early repayment penalties. The loan is mainly in the student’s name but co-signed by the parent. For graduates students, a federal plus loan can be acquired without a co-signer provided the student has excellent credit history. The parent or graduate student must apply for the loan ever year.

Generally, there are two types of federal financial aid – the subsidized and unsubsidized loan. A subsidized loan is where interest charging is deferred until repayment period begins which is usually after graduation, while interests for unsubsidized loans are charged immediately. Federal plus loans are non-subsidized but since they offer greater credit limit that covers most of your educational expenses, they can be considered one of the best secured loans easily obtainable.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.