Parent student loan, which is also referred to as PLUS loan or parent PLUS loan is a type of student loan that is offered to the parents of students who are enrolled in a graduate or a professional course or in post-secondary institutions.
Taking a parent student loan is a major decision, as it can affect your finances for at least a decade.
Hence, it is crucial to do your research and understand parent student loans completely. Following will help you understand better about parent student loans.
There are certain eligibility requirements to qualify for a parent student loan:
Your need for financial aid will be evaluated on the basis of information you provide on Free Application for Federal Student Aid (FAFSA).
To get a parent PLUS or a parent student loan, the parent should have a good credit score. You can be denied of a parent PLUS loan if you have an adverse credit history due to bankruptcy or other delinquencies.
This goes without saying that you have to be the parent of the dependent college student. This can be your biological or adopted child or stepchild in some cases who is enrolled in a course or college. You should be paying for more than half of their support, living expenses included.
According to federal student aid office, you are entitled to get a parent student loan if your child has college costs that cannot be covered by other financial arrangements such as grants or the child’s own student loan.
Parent student loans will have some federal student loan benefit. For instance, the loan repayment options include:
Deferment or forbearance due to financial hardship or unemployment.
The parent might be entitled to get public service loan forgiveness for any remaining balance post 10 years of on-time payments.
Through the income-contingent repayment plan, the balance amount can be waived off after 25 years.
Just like other loan options, parent student loan also has a few disadvantages. For starters, unlike undergraduate student loans, parent student loans do not defer payment of the loan until 6 months after the student graduates and leaves the school. The repayment of a parent student loan kicks in once the loan is disbursed.
Parent student loans also come at higher costs. They carry higher interest rates and loan fees. The interest rate recorded for the year 2017-18 was around 7 percent with a loan fee of around 4 percent.
Private student loans are more consumer-friendly as they offer terms that are as good as federal student loans. Private parent student loans are offered by private lenders which include banks, credit unions, and financial tech companies.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.