Is it possible to find out if you are eligible for a Plus Loan before committing to a school? I don’t want to pay an admissions deposit and accept financial aid award only to find out I have been denied a plus loan to fill in the gap. Thanks
Parent Plus loan?
Yes, sorry, referring to parent Plus loan. Thanks. I am non custodial parent, have a bankruptcy in my past after the divorce, wondering if there is a way to find out if I qualify before daughter has to decide on a school.
I could be mistaken, but isn’t it possible to apply for the loan now without actually having to accept it immediately?
You should be able to apply just to see what the approval would look like, however if you apply too early before your prospective school starts processing applications - you run the risk of the credit check expiring and you are then required to reapply. If there are any credit issues between the period of the credit expiring and the new application, you could run the risk of not being approved (just something to keep in mind).
How long ago was the bankruptcy??
It was 3 years ago, I think I read no adverse credit history in past 5 years, thought I would apply just to see if I maybe fall through the cracks. If I don’t get approved, custodial parent can and I can make payments to her. Want to avoid that if possible.
Is there an affordable option that doesn’t require taking out a plus loan? How much would it entail? Do you think it would be a good idea to take out plus loans for 4 years? What if the custodial parent would take it out and you can’t pay? Her name would be on it.
A bankruptcy in the last 3 years is likely going to get you denied. However, you could use custodial parent as a co-signer, rather than have custodial complete application and you workout a payment arrangement behind the scenes.
Oh good idea, hadn’t thought of that option. Don’t know if there is a cheaper option yet, still waiting for 9 admissions decisions and 11 financial aid awards. State U only gave $8000 merit scholarship even though class valedictorian, EFC is $13000. Going to be a long stressful couple of weeks waiting for decisions.
Not sure how much you need to cover the gap, but if you were to be denied for PLUS, the student is eligible to borrow and additional $4,000 in the unsubsidized Stafford loan, bringing their eligibility to $9,500 for the year. This is only if you choose to not pursue a co-signer or attempt an appeal with Direct Loans.
Your daughter has an 8k merit and is eligible to borrow 5.5k in her own name. Would this cover tuition and fees? Is commuting from home an option ?
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What if the custodial parent would take it out and you can’t pay? Her name would be on it.
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Another concern is that if the OP were to die, the Plus Loan would still exist because it wouldn’t be in HIS name.
If your ex does take out the loan, be sure to have life insurance to cover that debt.
How much are you going to borrow for all four years? This seems very risky…too much debt.
your D can borrow $5500. However, her FA pkgs are probably ALREADY showing those loans…is that the issue?
How much can you pay each year out of CURRENT income?
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Don’t know if there is a cheaper option yet, still waiting for 9 admissions decisions and 11 financial aid awards. State U only gave $8000 merit scholarship even though class valedictorian, EFC is $13000. Going to be a long stressful couple of weeks waiting for decisions.
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Merit is usually based mainly on TEST scores. Being Val rarely nets very much money. What were her test scores?
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First time poster, been lurking for 3-4 weeks as my only daughter is a high school senior, accepted at her 4 safeties/matches, waiting on 9 more schools, mostly all reaches. I’ve been doing some light reading, IRS Pub 970, trying to sort through all the acronyms, AOTC, QEE, LLC, QTP. How about one more - WT? Anyway, I am the noncustodial parent, my daughter lives with her mother. We have a 529 plan but it’s in my name with my D as beneficiary.
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BTW…your D didn’t really have safeties if she doesn’t’ have any acceptances with assured aid that you know that you can afford without Plus Loans. For a school to be a safety, it has to be affordable…meaning that costs are covered by ASSURED merit/grants, small student fed loans, and family funds (not unknown Plus loans.)
2100 SAT, 34 ACT, 4.0 GPA. Too far away to commute to state U. Thought they would offer at least enough to cover tuition, that is her true financial safety. Just have to wait and see what the next week brings. Thanks for all the input.
Wow she could have received a full ride with those stats.
We are in the same situation as the original poster. Don’t see that anyone has answered the original question. Can we find out in advance if approved for PLUS loan prior to paying for deposits? For how long is the decision good for? And yes, loans are our only option for my son to attend college. We are full aware of the risk we are undertaking…
You should be able to apply just to see what the approval would look like, however if you apply too early before your prospective school starts processing applications - you run the risk of the credit check expiring and you are then required to reapply. If there are any credit issues between the period of the credit expiring and the new application, you could run the risk of not being approved (just something to keep in mind).
Credit check is good for 90 days.
Ask the school’s FA office when you can apply for PLUS. The answer for OP is no, with a bankruptcy within the last 5 years he will not qualify. There are not very many requirements, but one is no bankruptcy within the last 5 years, not more than 90 days late on any debt within the last 3 years, and no charge offs.
If the parent is denied, the student qualifies for an additional $4000 in Stafford loans.
The application for PLUS would be yearly, so the parent would have to apply again the following year with the same limits. Debt to income ratio is not considered for a PLUS loan, so as long as the parent’s credit is in the same shape the following year, it would not matter that the parent had taken out thousands in loans for freshman year.