Many are beginning to wonder how they are going to pay for their own expenses at college or their child’s expenses. There are many solutions. You can get a private student loan and pay those high interest rates that just knock your entire loan up by triple the amount. Why would you do this when you can get a federal PLUS loan with a fixed interest rate of 8.5 percent?

First of all, what is a federal plus loan? A federal plus loan is a loan for parents with dependent students attending an approved university or community college. Remember, your child must still be a dependent or you will not be able to apply for this federal loan. This loan is used t cover any allotted expenses by your child. The loan will be automatically disbursed to your child’s school to cover any left over expenses that may be in their account. Once this has been completed, the university will cut a check to the parents in the amount of the excess funds. Many loans require this, so it’s not just something that the federal plus loan requires. Many parents would much rather be in control of where the money is going and being spent, which makes a federal plus loan a great option.

These loans are not need based, but are actually based on the parents credit history. You may want to check with your child’s school to find out whether or not the FAFSA needs to be completed in order to receive this federal funding. Some schools require it. These loans require no collateral and may even be tax deductible!

A federal plus loan is a great option for parents wanting to help their children out. Research and get the information needed from your child’s school and get that application underway! Surprise your child with the extra money that they will have.