Has anyone done this for their teen for college and did it hurt your finances? Did you have to pay it back immediately?
Yes, no - I don't pay it back until she gets out of school. My plan is to pay off credit while she is in school and then school loans at a manageable amt after she graduates or 6 mos after. As long as I pay them back, the government should be happy, it may take 20 yrs but it is what it is. lol
You can pay them immediately if you choose too.
You don't have to pay it back until they stop going to school. I did it, it was reasonable to pay back and if you have any problems they will work with you.
There is no grace period for a Direct PLUS Loan—the repayment period begins 60 days after your school makes the last disbursement of the loan. However, if you're a parent PLUS borrower, you can defer repayment of Direct PLUS Loans first disbursed on or after July 1, 2008, while the student for whom you obtained the loan is enrolled at least half time, and for an additional 6 months after the student graduates or drops below half-time enrollment (half-time enrollment status is determined by your child's school). You must separately request each deferment period. http://www.direct.ed.gov/parentrepay.html
So, YES you must repay immediately, unless you REQUEST A DEFERMENT.
Our Parent Plus loans were prior to 2008, so we did NOT have the option to request deferment. And they did not hurt our finances. I fail to see how they would, as long as you borrow ONLY what you can afford to repay, and repay on time, as instructed. Which we did, just like with any loan we have ever taken.
Since the PLUS loan had the highest interest, that was the SMALLEST part of the college financing. First was money we had saved, money the kids earned working, Stafford Unsub loans the kids took out in their own names, and finally the Parent PLUS.
In addition, students who earn a major, and obtain a job in certain fields and in certain localities that are underserved, are eligible to apply for state and federal loan forgivness grants. One of my daughters WAS awarded such a grant, but students are only eligible after working for a stated number of YEARS in the appropriate job. And you have to APPLY for the grant. It is not awarded automatically.
Our loans were paid off ahead of schedule.
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