<p>So if I need to cancel a Parent PLUS loan will there be a fee? Will I still need to pay the origination fee?</p>
<p>I applied thinking that there was no way I would be approved for it given our credit rating...but knowing that I would need to be turned down for my son to be able to apply for additional federal loans.</p>
<p>Well, I got approved and will need to cancel the loan and he'll have to apply for a private loan. Will I be charged a fee?</p>
<p>I can find info that says I can cancel the loan before funds are disbursed, but only now do I realize that I can't find any discussion of whether or not that will cost me or when.</p>
<p>Of course I could always reduce the loan to only what is absolutely needed. I applied for the full amount he’d need so he’d be covered even if grandma didn’t come through with some money for college like she’s promised. If she pays some then we’ll need to borrow less.</p>
<p>If my son applied for a private loan for the needed amount would his origination fee and interest rate be lower or would it be at least the same as the Parent Plus?</p>
<p>Did you pick a lender, or is the school a direct lender? I have direct lending experience - you don’t have to pay anything if you cancel the loan. We just ask the parent to fill out a loan revision form asking to cancel the loan. If the parent never signs the master promissory note, it will never pay out, anyway.</p>
<p>As for private loans, those vary. Search this forum for info on private loans.</p>
<p>Thanks.</p>
<p>I did have to pick a lender because it’s a private college and NOT a direct lender. (At least I know that with my other sons college I didn’t have to pick a lender.) So does that make it a private loan? I signed the MPN electronically.</p>
<p>No, it’s not a private loan. It’s a FFELP loan (lender is not the government, but it’s still government-backed). Call you school & ask what to do.</p>
<p>Even though it is a FFELP loan, it can be cancelled without any fee. It can also be reduced. Contact your school and let them know how you want the PLUS handled. You may have to submit our request in writing but at least you would know the proper procedure.</p>
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<p>If your son doesn’t have a job, and credit/earning history, of his own then he’d likely need a cosigner to get a private loan. The rate, etc. would be variable and depend on the cosigner’s credit rating. So, it may be less or more than the Plus loan and may fluctuate during the term of the loan. Some private lenders have discounts and will release the cosginer from the obligation after a number of on-time payments, some don’t.
You can find more information here and by visiting the websites of private ed loan lenders:
[FinAid</a> | Student Loans](<a href=“Your Guide for College Financial Aid - Finaid”>http://www.finaid.org/loans/)</p>
<p>At this point I’m thinking that perhaps simply reducing the amount of the loan to just what he absolutely needs might be the best approach. Still thinking it through. Thanks so much for the input. I really appreciate it.</p>