How To Get A Sallie Mae Parent Loan?

Sallie Mae offers a range of loans for students, including the Smart Option Student Loan for undergraduates and a suite of loans for graduate students. The company also provides Parent PLUS Loans, which are federal education loans given directly to parents of dependent students to help finance their child's college or trade school. These loans are meant to supplement other financial aid offered and can be awarded for up to the total cost of attendance minus any other financial aid received.

Parent PLUS Loan

A Parent PLUS Loan is a credit-based federal education loan provided directly to parents of dependent students to help cover the costs of their student's college or career school. It is meant to supplement school, state, and other federal financial aid offered. It is also known as a Direct PLUS Loan.

To apply for a Parent PLUS Loan, you must first fill out the Free Application for Federal Student Aid (FAFSA). You can then apply online. Be sure to download and sign the Master Promissory Note (MPN), which outlines your agreement to repay the loan. If you have any questions on how to apply or sign the MPN, contact the school’s financial aid office.

After you apply, the government will send your information to the school to confirm how much you can borrow. You don’t have to borrow the full loan amount. You can choose how much you want to borrow, and the money goes directly to the school. If there are any leftover funds, the refunds are sent to the parent or to the student with the parent’s permission.

The interest rate for Parent PLUS Loans disbursed between July 1, 2024, and June 30, 2025, is 9.08%. There is also a 4.228% fee for loans disbursed on or after October 1, 2020. These rates can change on July 1 each year, but once you take out the loan, the rate never changes. While Parent PLUS Loans have higher interest rates than federal student loans, they can cover the full cost of attendance minus other financial aid.

Direct PLUS Loan

To qualify for a Direct PLUS Loan, you must meet three criteria:

• The borrower must be the biological, adoptive parent, or in some cases, the step-parent of a student enrolled at least half the time at an eligible school. Grandparents and legal guardians are not eligible to borrow Parent PLUS Loans, even if they have primary responsibility for the student, unless they have legally adopted the dependent student.
• Pass a credit check. If you cannot pass the credit check, you can still be approved for a Parent PLUS Loan if you obtain an endorser (someone who agrees to pay the Parent PLUS Loan if you do not repay it) or are approved by the Department of Education through an explanation of extenuating circumstances related to your adverse credit history.
• Meet the general eligibility requirements for federal student aid.

The interest rate for Parent PLUS Loans disbursed between July 1, 2024, and June 30, 2025, is 9.08%. This rate is fixed for the life of the loan. There is also a 4.228% fee for loans disbursed on or after October 1, 2020. These rates can change on July 1 each year, but once you take out the loan, the rate never changes.

Parent PLUS borrowers may also qualify for an additional repayment plan to reduce monthly payments, the Income-Contingent Repayment plan (ICR Plan). You can become eligible by consolidating your Parent PLUS loan into a Direct Consolidation Loan.

Variable and fixed rates

Sallie Mae offers both variable and fixed interest rates for its Smart Option Student Loan. Variable interest rates can increase or decrease over the life of the loan, depending on changes to the 30-day Average Secured Overnight Financing Rate (SOFR). This means that your monthly payments can fluctuate as market conditions change.

On the other hand, fixed interest rates remain the same throughout the life of the loan, resulting in predictable monthly payments. While fixed rates offer stability, they may be higher compared to variable rates. Additionally, with fixed rates, you may have the option to make lower payments when interest rates in the market fall.

• For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, with 51 payments of $25.00, 119 payments of $182.67, and one payment of $121.71, resulting in a total loan cost of $23,134.44.
• For a borrower with $20,000 in prior loans and a 2-year in-school period, it results in a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53, and one payment of $40.35, for a total loan cost of $24,438.22.

It's important to note that advertised variable rates are the starting range and may vary outside of that range over the life of the loan. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option. Unpaid interest is added to the loan's Current Principal at the end of the grace/separation period.

Freshman students can save on their Total Loan Cost by choosing the interest repayment option, which can result in a 0.5 to 1 percentage point lower interest rate compared to deferring payments. Additionally, enrolling in auto-debit through Sallie Mae can provide a 0.25 percentage point interest rate discount during active repayment.

Eligibility and requirements

Sallie Mae offers Parent PLUS Loans to help dependent undergraduate students pay for college or trade school. These loans are also known as Direct PLUS Loans. They are credit-based federal education loans provided directly to parents of dependent students to help cover the costs of their child's college or career school.

To be eligible for a Parent PLUS Loan, the borrower must be the parent of a dependent student. The student must be an undergraduate enrolled in college or trade school. The loan is meant to supplement school, state, and other federal financial aid offered to the student.

A credit check is required to determine eligibility for a Parent PLUS Loan. The borrower cannot have previous student loan defaults unless they have been resolved or consolidated into a federal direct loan. The borrower must also demonstrate the ability to assume full responsibility for the loan and pass a credit review, which includes having no bankruptcy or foreclosure.

The loan amount cannot exceed the cost of attendance less any financial aid received by the student. The borrower must apply for a new loan each school year. The student's expected financial aid and scholarships, as well as any employment information and financial information, will be taken into account when determining the loan amount.

To apply for a Parent PLUS Loan, the borrower must first fill out the Free Application for Federal Student Aid (FAFSA). If approved, the borrower must then download and sign the Master Promissory Note (MPN), which outlines the agreement to repay the loan. The borrower can apply online and choose the amount they want to borrow.

It is important to note that interest rates for variable-rate loans may increase or decrease over the life of the loan, and interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option, and unpaid interest is added to the loan's current principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto-debit through Sallie Mae.

Applying for a loan

Sallie Mae offers Parent PLUS Loans, also known as Direct PLUS Loans, to help US citizens or eligible non-citizens cover the costs of their dependent student's college or career school. These federal education loans are provided directly to parents and are meant to supplement school, state, and other federal financial aid offered.

To apply for a Sallie Mae Parent PLUS Loan, follow these steps:

• Start with FAFSA®: Begin by filling out the Free Application for Federal Student Aid (FAFSA®). This is where you will first see the option for a Parent PLUS Loan. You can fill out the FAFSA form online at the Federal Student Aid website.
• Credit Check: Keep in mind that a credit check will be performed as part of the application process to determine any late payments and recent defaults in your credit history.
• Apply Online: You can apply for the Parent PLUS Loan directly on the Sallie Mae website. Be sure to carefully read through all the terms and conditions before submitting your application.
• Download and Sign the Master Promissory Note (MPN): After applying, download and sign the Master Promissory Note (MPN), which outlines your agreement to repay the loan. If you have any questions about the MPN, you can contact the school's financial aid office for assistance.
• Choose Loan Amount: Determine how much you want to borrow. The Parent PLUS Loans are awarded for up to the total cost of attendance minus any financial aid your child has already received.
• Consider a Cosigner: If needed, you can apply for a cosigner release. However, only the borrower may apply for cosigner release, and they must meet certain requirements, including demonstrating the ability to assume full responsibility for the loan and passing a credit review.
• Interest Rates and Repayment Options: Note that interest rates for variable-rate loans may increase or decrease over the life of the loan. With the Fixed and Deferred Repayment Options, the interest rate is typically higher than with the Interest Repayment Option. To receive a 0.25% interest rate discount, the borrower or cosigner can enrol in auto-debit through Sallie Mae.
• Annual Renewal: Remember that Sallie Mae loans cover enrollment periods of up to 12 months, and students must apply for a new loan each school year.

Frequently asked questions