CBS News
Parent PLUS loans: What you need to know
Getty Images
Going to college is more expensive than ever. According to the Education Data Initiative, a 4-year, full-time undergraduate degree averages $38,270. Students attending private institutions will pay more, while those attending in-state public schools tend to pay less.
Regardless of where you go to school, not every student has the cash to pay for the costs. While federal student loans offer loans for dependent students — or younger students who rely on their parents for financial support — that might not be enough for every college attendee. A 2023 Sallie Mae study found that the average family spent more than $28,000 on their child attending college in the 2022-2023 school year.
The same study found that the typical family expects parents’ income and savings to cover about 40% of college, and another 8% goes to parental borrowing, including Parent PLUS loans. Below, we’ll detail what you need to know about Parent PLUS loans, including how they impact paying for your child’s education and repayment long after they’ve left college.
Start exploring student loan options for the upcoming semester here now.
What is a Parent PLUS loan?
A Parent PLUS loan is a federal student loan taken out by the parents of dependent undergraduate students. Independent or graduate and professional students can borrow Grad PLUS loans.
Since it’s a federal loan, parents and dependent students must complete the Free Application for Federal Student Aid (FAFSA) and exhaust all other federal funding options — including scholarships, grants, work-study programs and other loans — before getting a Parent PLUS loan.
“Parent PLUS loans can be a great option once students are already maxed out on their federal aid package after completing the FAFSA,” says Alex Cavaliere, a CSLP and financial advisor at Diamond State Financial Group.
Learn more about your current student loan options online today.
Who is eligible for a Parent PLUS loan?
Out of all the federal student loans, Parent PLUS loans are the only ones where parents — not students — take out a loan to pay for their child’s education costs. Both parents and children need to meet requirements to borrow this loan. Here’s how to qualify:
- Parents must be the biological or adoptive parents of a dependent undergraduate student enrolled in an eligible school at least part-time.
- The parent applicant must not have an adverse credit history, including no defaults, foreclosure, wage garnishments, tax liens or bankruptcies in the last five years.
- Students must meet general financial aid eligibility requirements, like enrolling in an eligible school at least part-time.
Out of all the federal student loans, Parent PLUS loans are the only ones that require a credit check. But many parents probably qualify, says Debbie Schwartz, the founder of Road2College, a college planning site.
“Parent PLUS loans require a credit check but the credit criteria to borrow is very loose,” she says. “As long as there is no adverse credit history, a parent can borrow as much money as they need, up to the cost of [college attendance]. This gives parents, who do not have strong credit scores, an option to borrow for college.”
How much can you borrow with a Parent PLUS loan?
Direct loans, including subsidized and unsubsidized loans, come with borrowing limits based on dependency status and school year. But Parent PLUS loans don’t have the same restrictions. Saki Kurose, a CFP and associate financial advisor at Omega Wealth Management, says you can borrow as much as you need with these loans.
“Parent PLUS loans are the only type of federal student loan that a parent can take out for their student,” she says. “Since there is an annual limit for federal undergraduate loans that can be taken out by the students under their names, Parent PLUS loans can be a great tool when their undergraduate students are not able to cover the full cost of their college costs with Direct Subsidized and Unsubsidized undergraduate loans.”
It’s crucial to avoid overborrowing, however, which could happen since there aren’t any limitations on Parent PLUS loans.
“Parents can borrow too much and not realize how much the total cost of the loan really is,” Schwartz says.
Parent PLUS loans vs private student loans
The 2023 Sallie Mae study found that most families will use less than 30% of scholarships and grants, or free money options that don’t require repayment after you leave school. Whether you exhaust all your free money options or lack time or resources to get scholarships and grants, Parent PLUS loans are a low-cost option to pay for school without taking out private student loans.
“While the interest rate is a crucial factor, it’s also important to assess the overall affordability of the loan,” Kurose says. “Federal loans offer benefits like income-driven repayment plans and potential loan forgiveness, which private loans do not.”
Parent PLUS loans might qualify for other federal benefits, like deferment, forbearance and universal fixed interest rates. All borrowers pay the same interest rate regardless of credit history, depending on the year you borrow the loan.
“The only borrower of a Parent Plus loan is a parent,” Schwartz says. “The student has no legal responsibility to pay back this loan. With private student loans, the student is the borrower and the parent is a co-signer, so both share legal responsibility for paying back the loan.”
Private student loans, which can be borrowed via credit unions, banks and even online lenders, operate differently. Students borrow these loans with parents, who help them qualify as co-signers since many students don’t have the credit standing to borrow alone. Repayment terms and benefits are up to each lender, but many don’t offer the same benefits as federal student loans.
“Private student loans have no leniency in repayment — you can only refinance to a better rate or extend the repayment term for a lower monthly payment,” Cavaliere says. There are no income-based repayment plans for private student loans. If you can’t afford to make payments, you don’t have many options for assistance.
The bottom line
Before taking out a Parent PLUS loan, make sure you understand who’s responsible for repayments and what’s at stake for borrowers. After you get all the free money you can, compare all your loan options to see which ones offer the lowest interest rates, are most accessible to qualify for and have the most repayment benefits.
President Biden is in Arizona on Friday to issue a formal presidential apology to Native American communities for the atrocities committed against Indigenous people during a 150-year era of forced federal Indian boarding schools. The president’s remarks are scheduled for 1:30 p.m. EDT.
The president chose to speak at the Gila River Indian Community in Arizona, although his apology is for all tribal communities that suffered. From 1819 through the 1970s, the federal government and religious institutions established boarding schools throughout the country to assimilate Alaska Native, American Indian and Native Hawaiian children into White American culture by forcibly removing them from their families, communities and belief systems. Many children who attended these boarding schools endured emotional and physical abuse, and hundreds of them died.
“I’m heading to do something that should have been done a long time ago,” Mr. Biden told reporters before boarding Marine One on Thursday afternoon. “Make a formal apology to the Indian nations for the way we treated their children for so many years.”
Andrew Caballero-Reynolds/AFP via Getty Images
The Department of the Interior, run by the first Native American Cabinet secretary, Deb Haaland, conducted the first-ever federal investigation into the Indian federal boarding school era. It revealed that more than 500 American Indian, Alaska Native and Native Hawaiian children’s deaths occurred at 19 of the federal Indian boarding schools, and identified 53 marked and unmarked burial sites at school sites nationwide. The federal government often contracted with Presbyterian, Catholic and Episcopalian religious institutions to run the schools.
The report found that when children failed to meet standards or broke rules, they were subjected to corporal punishment, including “solitary confinement; flogging; withholding food; whipping; slapping; and cuffing.” Oftentimes, older children were forced to inflict punishment on their younger classmates.
Speaking with reporters aboard Air Force One en route to Arizona on Thursday, Haaland’s voice broke.
“For more than a century, tens of thousands of Indigenous children, as young as 4 years old, were taken from their families and communities and forced into boarding schools run by the U.S. government and religious institutions,” Haaland said. “This includes my own family. For decades, this terrible chapter was hidden from our history books. But now, our administration’s work will ensure that no one will ever forget.”
How to watch President Biden’s remarks at the Gila River Indian Community
- What: President Biden delivers an apology on behalf of the country for atrocities at federal Indian boarding schools.
- Date: Friday, Oct. 25, 2024
- Time: 1:30 p.m. EDT
- Location: Gila River Indian Community in Arizona
- Online stream: Live on CBS News in the player above and on your mobile or streaming device.
KanawatTH/Getty Images
If you’ve paid any attention to the precious metals market recently, you’re likely aware that gold has been on an impressive upward trajectory since the start of the year. On January 1, gold was trading at $2,063.73 per ounce. Fast forward to today (October 25, 2024), and the price of gold is sitting at $2,734.46 per ounce. This represents an increase of $670.73 per ounce, amounting to a growth rate of approximately 33% in a little over 10 months. This significant growth has captured the attention of investors and market analysts worldwide, as gold’s performance defies predictions and underscores its historic role as a stable store of value.
The recent rally becomes even more noteworthy when compared to gold’s prior record highs. Just this August, the price reached $2,525 per ounce — a milestone that marked a new peak at the time. However, gold’s price was far from plateauing at that point. The price of gold continued to surge, eventually surpassing that mark by over $200 per ounce. This upward movement has established the past year as a standout year for gold, drawing investors who may have initially seen these peaks as ceiling prices, but who now view gold’s price potential as far more expansive than anticipated.
But while there’s no question that gold has offered some of the biggest returns over the past year, many investors are questioning what, precisely, is driving this sustained surge. So why is the price of gold so high right now? That’s what we’ll break down below.
Add gold to your investment portfolio today.
Why is the price of gold so high right now?
Here are a few of the factors that have been pushing gold’s price to new heights over the last year.
Central banks are buying in
A primary force behind gold’s recent bull run is the purchasing activity of central banks worldwide. Central banks, particularly those in emerging economies, are increasing their gold reserves as a hedge against economic uncertainty and to diversify their holdings away from traditional fiat currencies. This sustained buying pressure from such powerful market participants has created a strong foundation for price appreciation and signals a broader shift in institutional attitudes toward gold as a strategic asset.
Investors are capitalizing on short-term gains
In addition to central banks, individual investors have been flocking to gold, seeing an opportunity for both short-term and long-term gains. With gold prices rising so quickly, gold has become an attractive asset for speculative trading as well as a safer, longer-term investment. So, some investors are now seeking quick returns by betting on the momentum of gold’s climb to earn rapid profits, while others continue to rely on gold’s stability.
The rush of buying and trading activity creates a feedback loop, further driving demand and prices up. This blend of trading activity has been a core factor in the consistent upward price movement over the past year, illustrating gold’s dual role as both a stable store of value and a source of near-term market excitement.
Find out more about your gold investing options here.
More investors are diversifying
Ongoing geopolitical tensions, including election year uncertainties, are also playing into gold’s price surge. Elections can influence market sentiment by adding uncertainty, often triggering interest in safe-haven assets like gold. Additionally, global economic slowdowns and international conflicts, such as those involving energy trade disputes, have introduced more volatility in the global market, leading investors to seek refuge in gold.
With each spike in uncertainty, gold’s appeal as a safe, non-correlated asset increases, attracting investors looking to hedge against potential market downturns. For many, gold remains a reliable safeguard, reinforcing its role as a cornerstone in diversified portfolios, especially during periods of unpredictability.
The limited supply also plays a role
The limited supply of gold has also contributed to its recent price surge. Gold is a finite resource, after all, and mining new gold is both costly and time-intensive. As demand grows from both investors and industrial sectors, the pressure on gold’s limited supply intensifies, elevating its value.
Technological advancements in sectors like electronics and green energy have also increased gold’s utility. Gold is used in electronic components, medical devices and emerging green technologies, creating steady industrial demand. This expanding industrial application is a lesser-known but increasingly important factor, reinforcing gold’s value beyond traditional uses.
The bottom line
The remarkable ascent of gold prices in 2024 can be attributed to a perfect storm of global economic and political factors. Central banks’ substantial purchases, investors’ pursuit of both security and short-term gains, geopolitical uncertainties and the finite nature of gold itself have converged to create a robust and sustained rally.
Looking ahead, many analysts believe that gold’s trajectory may continue upward, especially if central banks and industrial sectors sustain their interest and if global uncertainties persist. While the current price surge may eventually stabilize, investors and analysts alike are continuing to keep a close eye on this precious metal right now, as gold continues to set new records and play a vital role in today’s dynamic economic landscape.
At 56, Kim Hale is reigniting her passion for dance, sharing her journey on social media and embracing the motto, “Dreams have no deadlines,” as she pursues a role on Broadway.
Hale, who has over 13 million likes on TikTok, said she has always loved the stage and the energy that New York City brings,
“It just feels like a city where you can dream big,” said Hale.
Hale’s dream of performing on Broadway began in her early years, driven by her passion for expressing herself through movement. She pursued that ambition into her 20s and 30s, but eventually left New York, finding the constant rejection difficult to handle. Reflecting on that time, she acknowledges that she was more vulnerable then. Relocating to California, Hale remained connected to dance, teaching and working for renowned dancer and actor Debbie Allen.
“The biggest gift I got was working for Debbie Allen, and being able to be in her world, which taught me that you can take the skills of dance and apply them to anything,” said Hale.
Hale was around dance, but she wasn’t dancing, and it turns out, that is what her heart still wanted.
“It took COVID. It took the loss of both of my parents. It took skin cancer to get me to step back into a dance studio,” said Hale.
With encouragement from a friend, Hale enrolled in a hip-hop class and “ended up loving it,” saying that each class helped her reconnect with herself.
Hale began sharing her journey on social media, where her posts took off. Broadway choreographer Jerry Mitchell commented on one of her videos, telling her, “Dreams have no deadlines.” It’s a mantra she holds close.
“I just held onto that,” she said.
In May, Hale got to perform in a special showing of “Chicago,” though she doesn’t see it as her official Broadway debut.
“I want to audition and book a show because I prepared for it. I was ready when opportunity met preparation, and I got it,” she said.
For Hale, her return to New York and pursuit of a Broadway role is about more than just achieving a dream.
“The goal is to see what I’m capable of,” she said. “You have to do the work. You have to be ready. But I believe that if it’s meant for me, it will happen. And if it’s not, maybe there’s something bigger out there.”
