FAFSA Parent Plus loan excess funds - where do they go and how much to request?

Thank you! I didn't realize there was an option on the application to choose where excess funds go. That's really helpful. Do you know if you can change that choice after submitting the application? I'm thinking I might want the funds to come to me so I can distribute as needed.

YES! Parent Plus interest rates are terrible!! The 2025-2026 rate is like 8.05% - basically a credit card! We always borrow EXACTLY what we need and nothing more.

This is incredibly helpful! I didn't realize I could apply for additional funds mid-year if needed. That makes me feel better about being more conservative initially. I think I'll add about $2,500 to cover books and some expenses, and then we can reassess in January if she needs more.

She already maxed out her federal loans ($5,500 last year and $6,500 this year), and we're trying to avoid private loans because the variable rates seem risky. Plus I have excellent credit, so I qualified for the Parent Plus without any issues. I'm planning to help her pay it off quickly after graduation.

While Parent Plus loans do have higher interest rates than Direct Student Loans, they often have better terms than private loans, especially for families with good credit. For the 2025-2026 year, the fixed interest rate of 8.05% on Parent Plus is high, but it comes with federal protections that private loans don't offer. Each family's situation is different, so what works for one may not work for another.

@Sean Flanagan If you have good credit, you may get a better rate with a private loan. Plus loans don t'even look at your credit score to determine the rate, they only look for adverse credit history and I believe that is reflected in the rate offered. Private education loans also offer fixed interest rates. You may not realize it, but parent plus loans have a 4.228% federal fee in addition to interest that you should take into consideration. Private loans generally don t'have fees involved.

does this actually work? i tried calling fsa like 10 times about my daughters parent plus and kept getting hung up on after waiting forever

Yes, it really worked for me! I was super skeptical too, but after waiting on hold for 3+ hours across multiple days and getting disconnected every time, I was desperate. The Claimyr service connected me to an actual FSA agent who answered all my Parent Plus questions within about 15 minutes of using their service.

Oh wow, I hadn't even thought about emergency expenses like computer replacement or medical costs. That's a really good point. I think I'm going to request enough to cover tuition plus about $3,500 extra to create that buffer. Better safe than sorry!

This is such an important point! I forgot about that origination fee the first time I applied for a Parent Plus loan and was shocked when the amount that hit my son's account was less than I expected. Definitely factor this in!

Thank you!! I had no idea about the origination fee. So basically I need to request about 4.2% more than what I actually want to receive? That's really helpful information.

That makes a lot of sense. I just checked and her school's COA is $32,600, which includes about $2,800 for books/supplies and $3,400 for miscellaneous personal expenses. Her scholarships and direct loans total $14,200, so maybe I should request around $18,400? That seems more reasonable than just guessing.

Exactly! The COA is carefully calculated by the school to represent a realistic budget. Just be aware that some schools inflate their miscellaneous/personal expense categories, so you might want to look at the breakdown and decide if you need the full amount.

This sounds unusual. By federal regulation, Parent Plus loan refunds should go to the parent unless the parent specifically authorizes the refund to go to the student. I'd suggest contacting the Federal Student Aid office to discuss this situation, as the school may have made an error in their refund processing.

Great question! Once the excess funds are refunded to your daughter (whether as a check or direct deposit), there are essentially no restrictions on how she uses the money. The school doesn't monitor the spending, and legally it becomes her money to use as she sees fit. This is actually one of the concerns many parents have - you're borrowing money at 8%+ interest, but once it's refunded to the student, you have no control over whether it goes toward legitimate educational expenses or... well, anything else. That's why some parents prefer to have the excess funds come directly to them so they can distribute money for specific needs like books, supplies, or emergencies. It gives you more oversight of how those borrowed dollars are actually being spent.

@Admin_Masters hit the nail on the head! That's exactly why I decided to have excess funds come to me instead of my daughter. At 8.05% interest, I want to make sure every borrowed dollar is going toward legitimate educational expenses. I can always transfer money to her account for specific needs like textbooks or lab fees, but this way I maintain oversight. Plus, if she doesn't end up needing all the excess I budgeted for, I can immediately apply it back toward the principal to reduce the total interest I'll pay over time.

@Zara_Malik As someone who just went through this process last semester, I can confirm what others have said - once those excess funds hit your daughter's account, they're essentially hers to spend however she wants. The school has no obligation to track how refunded loan money is used. I learned this the hard way when my son used his excess refund for things that definitely weren't educational expenses! Now I always request that excess funds come directly to me as the parent borrower. That way I can still help cover her legitimate college costs like books, supplies, or emergency expenses, but I maintain control over money I'm paying 8%+ interest on. It's really about finding the balance between giving your daughter some financial independence while being responsible with borrowed funds that you'll be repaying for years to come.

@Zara_Malik I'm also new to Parent Plus loans and had the same exact question! From what I've learned in this thread, it seems like the smart approach is to have excess funds come to you as the parent, especially given those high interest rates. That way you can still help your daughter with legitimate expenses like books or emergencies, but you maintain control over money you're borrowing at 8%+. I'm planning to request about $2,000-3,000 extra (factoring in that origination fee someone mentioned) and have it come to me so I can distribute as needed. Thanks for asking this - it's helping me finalize my own Parent Plus strategy!

This is such excellent advice! I'm also new to Parent Plus loans and have been feeling overwhelmed by all the decisions. Your breakdown of calculating the exact gap plus realistic buffers makes so much sense. I hadn't thought about keeping detailed records throughout the year to improve future borrowing decisions - that's really smart. The point about having excess funds come to you as the parent rather than the student really resonates with me too. At these interest rates, it seems crucial to maintain control over every borrowed dollar. Thank you for sharing your experience - it's helping me feel more confident about my approach!

@Melody Miles Welcome to the Parent Plus journey! You ve'definitely absorbed all the key insights from this thread - I wish I had been this prepared when I started. Your 5-point plan is exactly what I would recommend to any parent just getting started. One additional tip I d'add: consider setting up automatic payments once your loan enters repayment, as many servicers offer a 0.25% interest rate reduction for autopay. It s'not huge, but every bit helps when you re'dealing with these higher rates. Also, don t'be afraid to reach out to your son s'financial aid office with questions - they re'usually very helpful in explaining the specific processes at their school. Good luck with your junior year financing!

@Dylan Evans Great question about getting better at estimating! As a newcomer myself, I ve'been wondering the same thing. From what I ve'gathered in this thread, it seems like keeping detailed records throughout the year as (@Zoe Stavros mentioned is key) to refining your approach. I m planning'to track every education-related expense my daughter has this first year so I can make a more informed decision next year. Also, knowing that you can apply for additional Parent Plus funds mid-year if needed as @Nia Wilson (pointed out gives me confidence) to start on the conservative side. Better to borrow a bit less initially and add more if necessary than to overborrow and pay interest on unused funds. The fact that any unused excess can be applied directly back to principal also helps - so even if you slightly overestimate, you can immediately reduce your total interest burden. We re all learning'together here!

@Gabriel Ruiz That s'a brilliant idea about setting up a separate savings account for Parent Plus excess funds! I hadn t'thought of that but it makes perfect sense for tracking purposes. It would make it so much easier to see exactly how the borrowed money is being used and ensure any unused portion goes straight back to loan payments. Regarding refund timing, from what I ve'read in other financial aid forums, most schools process excess fund refunds within 14-21 days after loan disbursement. However, this can vary significantly by school - some are faster, some slower. I d'definitely recommend calling your daughter s'financial aid office to ask about their specific timeline. You might also want to ask if they offer direct deposit for refunds, as that s'usually faster than waiting for a physical check to arrive by mail. Since textbooks are often needed right in those first weeks of classes, you might want to budget for purchasing them upfront and then reimbursing yourself once the excess funds are available. Just another reason why having those funds come to you rather than your daughter gives you more flexibility in managing the timing!

@Alejandro Castro Welcome to the Parent Plus journey! Your approach sounds very well thought out based on everything discussed here. Regarding your question about adjusting amounts year to year - from what I ve'gathered reading through everyone s'experiences, it seems like most parents do refine their borrowing strategy as they gain experience. The first year is definitely about building that baseline understanding of actual costs versus estimates. Then in subsequent years, you can adjust based on factors like: whether your student moved off-campus which (might change housing/meal costs ,)if they changed majors some (programs have higher lab fees or equipment costs ,)inflation in textbook prices, and just general life lessons learned from the previous year. I think @Zoe Stavros made such a good point about keeping detailed records throughout the year - that data will be invaluable when you re planning'sophomore year borrowing. You ll have'real numbers instead of estimates, and you ll know'if your emergency buffer was too much, too little, or just right. It s also'reassuring to know we can apply for additional funds mid-year if needed, so starting conservatively seems like the smartest approach for all us newcomers!

@Eloise Kendrick Great question about junior/senior year costs! As someone who s'been through this process with my older child, I can share that upper-level years often do bring some unique expenses to consider. Junior year sometimes involves study abroad programs if (applicable ,)internship-related costs like professional clothing or transportation, and often more expensive textbooks for specialized courses. Senior year can include job search expenses like professional headshots, interview travel, graduation fees, and sometimes thesis research costs depending on the major. That said, some costs might actually decrease - many students move off-campus which can sometimes be cheaper than dorms, and they get better at finding used textbooks or rental options. The key is staying flexible and using that detailed expense tracking approach others mentioned to adjust your borrowing strategy each year. Your plan sounds solid - that $2,500-3,000 buffer range seems to work well for most families, and you can always fine-tune based on your daughter s'specific major and activities. The fact that you re'thinking ahead to potential changes shows you re'approaching this strategically!