Will Parent PLUS loan affect my daughter's Pell Grant and need-based aid?

Parent PLUS loans won't affect your daughter's Pell Grant - that's set by her SAI (Student Aid Index) and won't change based on additional loans. As for the school-based aid, it depends on the institution's policies, but generally, most schools treat Parent PLUS loans as a way to meet the remaining cost of attendance AFTER all grants and scholarships have been applied. You can absolutely specify the exact loan amount you want - you don't have to accept the maximum. When you complete the PLUS loan application, you'll indicate the specific loan amount you're requesting.

my son got pell last year and we did parent plus and nothing happened to his pell money. the school aid is different every school has there own rules but usually pll is sacred

I literally just went through this with my twins! The Parent PLUS loan is designed to fill the gap AFTER all the aid has been awarded. The Pell Grant won't change at all since that's federal and based on your FAFSA. For the school aid, I was paranoid too, so I asked our financial aid advisor specifically and she said their institutional grants wouldn't be affected by a PLUS loan. But every school CAN have different policies! Some might reduce aid if you take additional loans, but that's usually for private outside scholarships, not federal loans. And yes, you definitely can specify the exact amount! On the studentaid.gov application for the PLUS loan, there's a section where you enter how much you want to borrow. I only took exactly what we needed after their scholarships and grants.

It was approved pretty quickly online - about 48 hours! But the disbursement to the school took about 3 weeks which was nerve-wracking with the payment deadline looming. If you have any credit issues though, the approval might take longer or require an endorser.

Financial aid professional here. To clarify a few things: 1. Federal Pell Grants are NEVER affected by Parent PLUS loans. Pell eligibility is determined solely by your SAI (Student Aid Index) from the FAFSA. 2. Institutional aid policies vary by school. The majority of schools consider Parent PLUS loans as a way to meet the remaining need, not as additional financial resources that would reduce need-based aid. However, it's always best to confirm with your specific institution. 3. You absolutely control the PLUS loan amount. You can request exactly the remaining balance amount. The maximum available is the Cost of Attendance minus any other financial aid received, but you don't have to take that full amount. 4. The application and approval process for PLUS loans happens on studentaid.gov, where you'll specify the exact loan amount you want to borrow. 5. Important note: PLUS loans have the highest interest rates among federal student loans (currently 7.65% for 2024-25) and also have an origination fee (about 4.2%). Make sure to factor those in when calculating how much to borrow.

No, there are absolutely no prepayment penalties on Parent PLUS loans (or any federal student loans). You can make extra payments or pay off the loan early without any fees. Just make sure to tell your loan servicer to apply extra payments to the principal balance rather than advancing the due date for future payments.

I tried calling Federal Student Aid for weeks to confirm exactly this about my son's aid package and kept getting disconnected or stuck on hold forever. Finally tried using Claimyr (claimyr.com) and got through to a real person in about 20 minutes. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ The agent I spoke with confirmed that Parent PLUS loans won't affect federal grants like Pell, and they walked me through the application process step by step. Saved me so much frustration!

It basically holds your place in line so you don't have to stay on hold. They call you back when an agent is available. Worked way better than trying to call directly.

BE CAREFUL!!! my cousin took out a plus loan and her daughter lost half her school grant!!!! the financial aid office said the plus loan meant they had "additional resources" and reduced the need-based scholarship. EVERY SCHOOL IS DIFFERENT!!!

I finally reached our financial aid office! For anyone with a similar question, they confirmed that at our daughter's school, Parent PLUS loans do NOT impact Pell Grants or their institutional need-based aid. The aid advisor said they view PLUS loans as a way for families to cover the remaining cost of attendance after all other aid is applied. She also confirmed I can request exactly the amount needed to cover the remaining balance and don't need to take the maximum. What a relief!

Yes! They said to wait until after receiving the final financial aid award letter, which we already have. They recommended applying for the PLUS loan about 8 weeks before the tuition deadline to ensure everything processes in time. I'm going to submit the application next week.

As someone new to this process, this thread has been incredibly helpful! I'm in a similar situation with my son starting college this fall. One question I haven't seen addressed - if we take out a Parent PLUS loan this year, does that make it easier or harder to get approved for one next year? I'm wondering if there's any impact on future loan applications or if each year is evaluated independently. Also, for those who have been through this before, do you typically need to reapply each academic year or is there some kind of automatic renewal process?

This has been such an informative thread! I'm in a similar boat with my daughter's aid package. One thing I wanted to add for future parents reading this - I found it really helpful to save a copy of the final financial aid award letter before applying for the Parent PLUS loan, just in case there are any discrepancies later. Also, our school's financial aid office mentioned that they send out updated award letters if anything changes, so keep an eye on your student portal even after the PLUS loan is processed. It sounds like most schools handle this properly, but having documentation never hurts when you're dealing with thousands of dollars!

This entire thread has been incredibly helpful! As someone just starting to navigate this process with my daughter, I'm feeling much more confident after reading everyone's experiences. One quick follow-up question - I noticed someone mentioned the 4.2% origination fee on PLUS loans. Does this fee get added to the loan balance, or do you pay it upfront? I want to make sure I'm calculating the true cost accurately when I determine how much to borrow. Also, has anyone found it beneficial to make payments on the interest while their student is still in school, or do most people wait until after graduation to start payments? Thanks to everyone who shared their experiences - this community is amazing!

This thread has been a goldmine of information! I'm currently going through this exact situation with my son's aid package. One thing I'd like to add that might help other parents - I called three different schools my son was accepted to and asked specifically about their policies regarding Parent PLUS loans and institutional aid. Two schools confirmed that PLUS loans wouldn't affect their need-based grants, but one school said they do a "resource review" after any additional loans are taken and could potentially adjust aid. It really does vary by institution! I'd strongly recommend getting their policy in writing via email rather than just a phone conversation. That way you have documentation if any issues arise later. Also, for those worried about the interest rate on PLUS loans, some schools offer payment plans that might be worth exploring as an alternative if you can manage the monthly payments without borrowing.

Most school payment plans do charge a small enrollment fee (usually $25-75 per semester), but it's often much less expensive than taking out a loan when you factor in interest over time. The payment plans typically spread your balance over 4-10 monthly installments throughout the semester. Some schools even offer interest-free payment plans, which can be a great alternative to PLUS loans if you have the monthly cash flow. I'd recommend calling the bursar's office (not just financial aid) to ask about payment plan options - they sometimes have different programs available that the financial aid office doesn't always mention. It's worth comparing the total cost of a payment plan fee versus the interest you'd pay on a PLUS loan, especially for smaller amounts.