Bank of America Education loans

Investment Banking Education / September 8, 2014

A PLUS loan for parents is designed for parents who want to help cover the cost of college without tapping into home equity, retirement savings or credit cards.

PLUS loans are made to parent borrowers regardless of income level. The amount a parent can borrow is determined by subtracting the amount of financial aid the student receives from the student’s cost of attending a particular school as defined by that school. For example, if you attended a school that cost $35, 000 a year and you receive a financial aid package of $15, 000 per year, the maximum amount your parent could borrow with a PLUS loan would be $20, 000 per year.

PLUS loans have a fixed rate set by the federal government and are subject to passing federal guidelines for creditworthiness. Repayment of these loans generally begins within 60 days after the funds have been completely disbursed. However, for PLUS loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment while the student is enrolled on at least a half-time basis and for an additional 6 months after the student ceases to be enrolled at least half-time. Interest immediately and PLUS borrowers are responsible for all interest.