Parent PLUS loan limits vs. Federal Direct loan - annual or per term? Repayment timing?
I'm so confused about how much we can borrow for my daughter's college expenses. For Parent PLUS loans, is there a minimum or maximum amount we can borrow per school? And is that amount per academic year or do we need to divide it by terms? Also, my daughter got approved for a $5,500 loan through her FAFSA - is that for the entire academic year? When do we actually have to start paying these loans back? Her first tuition bill is due next month and we're trying to figure out exactly how to cover everything.
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GamerGirl99
For Parent PLUS loans, there is no specific minimum, but the maximum you can borrow is the total cost of attendance minus any other financial aid received. This is calculated per academic year (fall through spring), not per term. Your daughter's $5,500 is likely her Federal Direct Loan annual limit for first-year dependent undergraduate students. Regarding repayment: - Parent PLUS loans: Repayment typically begins 60 days after full disbursement, though you can request deferment while your daughter is enrolled at least half-time. - Federal Direct Loans (your daughter's $5,500): She won't have to begin repayment until 6 months after she graduates or drops below half-time enrollment.
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Amina Diallo
•Thank you! This helps a lot. So for the Parent PLUS, if tuition+room+board is $30,000 per year, and she got $15,000 in scholarships and her $5,500 loan, we could potentially borrow up to $9,500 for the year through Parent PLUS? And we'd get that disbursed by semester?
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Hiroshi Nakamura
we took out a parent plus loan last yr for my son and yep its for the whole year not by semester. the school splits it up when they get it. we had to start paying it back right away tho which sucked, didn't know about the deferment thing
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Isabella Costa
•You can actually call your loan servicer and request retroactive deferment! I did this last year after making 3 payments I didn't need to make. They applied those payments to the principal. The deferment option isn't well advertised!
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Malik Jenkins
Are you sure it's a $5,500 loan and not a Pell Grant? Pell Grants don't need to be repaid, loans do. My daughter's financial aid letter was really confusing because they lumped everything together. If it's definitely a loan, make sure your daughter understands she'll need to pay that back eventually.
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Amina Diallo
•It's definitely a loan, not a Pell Grant. We checked her SAI and she didn't qualify for Pell. The $5,500 is split between subsidized and unsubsidized loans ($3,500 and $2,000). I'm trying to figure out if this is for the full year or if she can get more each semester.
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Freya Andersen
Just to clarify a few points: 1. $5,500 is the maximum Federal Direct Loan for a first-year dependent undergraduate student per academic year ($3,500 subsidized + $2,000 unsubsidized maximum). This amount increases slightly in subsequent years. 2. For Parent PLUS, the formula is: Maximum PLUS Loan = Cost of Attendance - Other Financial Aid Received 3. Disbursement happens by term (semester/quarter), not all at once, even though the loan is approved for the full academic year. 4. Interest begins accruing immediately on Parent PLUS loans and unsubsidized loans. Subsidized loans don't accrue interest while in school. Hope this helps!
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Amina Diallo
•This is incredibly helpful, thank you! One more question - do we need to apply for the Parent PLUS loan every year, or is it a one-time application that covers all 4 years?
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Freya Andersen
•You'll need to apply each academic year. The FAFSA and all related loans/aid are annual processes. This actually gives you flexibility to adjust the amount you borrow each year based on changing costs or financial circumstances.
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Eduardo Silva
I HATE the Parent PLUS loan system!! They let you borrow way too much and then charge insane interest rates (currently over 7%!!) with ridiculous origination fees. I borrowed for my son's freshman year and regretted it. Look into private loans with better rates before committing to PLUS!!!
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GamerGirl99
•While interest rates are higher on PLUS loans, they do offer federal benefits that private loans don't - income-contingent repayment options, potential loan forgiveness, hardship deferments, and death/disability discharge. Private loans may have lower interest rates but typically have fewer protections. It's important to weigh all factors beyond just the interest rate.
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Leila Haddad
Has anyone had success contacting FSA about Parent PLUS questions? I've been trying for 3 days and can't get past the automated system. So frustrating!!
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Isabella Costa
•I was in the same boat last month - spent hours listening to that awful hold music! Finally tried using Claimyr (claimyr.com) and got through to an agent in about 10 minutes. They basically hold your place in line and call you when an agent is available. Saved me so much time - check out their demo video: https://youtu.be/TbC8dZQWYNQ. The agent I spoke with was actually super helpful about Parent PLUS disbursement timing.
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Hiroshi Nakamura
dont 4get 2 look at the SAI on ur fafsa cuz that effects what ur kid gets for their loan amount not the parent plus. diff numbers
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Freya Andersen
•To clarify: The Student Aid Index (SAI) from FAFSA affects need-based aid eligibility, but Direct Loan limits for dependent students ($5,500 first year, $6,500 second year, $7,500 third year and beyond) are standard regardless of SAI. Parent PLUS eligibility isn't affected by SAI except that other aid awarded based on SAI reduces the maximum PLUS amount.
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Amina Diallo
Thanks everyone for the helpful information! I called our school's financial aid office this morning and confirmed we can borrow up to the cost of attendance minus other aid through Parent PLUS, and that it's per academic year. They also explained that while my daughter's $5,500 federal loan is disbursed by semester, we need to start planning for next year since the amounts and process will be slightly different. Really appreciate all the explanations about repayment timelines too - we're going to request deferment on the Parent PLUS until after graduation.
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GamerGirl99
•Great! One additional tip - even during deferment, interest will continue to accrue on the Parent PLUS loan. If you can afford to make interest-only payments during this time, you'll save money in the long run by preventing that interest from capitalizing (being added to the principal).
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Micah Franklin
Welcome to the community! As someone who just went through this process with my own child, I wanted to add a few practical tips that might help: 1. When you apply for the Parent PLUS loan, make sure to do it early in the process - approval can take a few weeks, and you want the funds available before tuition deadlines. 2. Keep detailed records of all loan disbursements and payments. The loan servicers can be confusing to deal with, and having your own documentation helps immensely. 3. Consider setting up automatic payments for any loans you do take - most servicers offer a 0.25% interest rate reduction for autopay, which adds up over time. 4. If your daughter's college costs change (like if she moves off-campus junior year), you can adjust your Parent PLUS borrowing accordingly each year. The Parent PLUS loan process definitely has a learning curve, but this community is great for getting real-world advice from parents who've been through it. Don't hesitate to ask more questions as they come up!
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