For Parents (Blog or Resources)

Preparing for FAFSA: Parent Edition

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If you plan on sending your child to college, you’ve probably given some thought to financial aid. When you think of financial aid, the FAFSA may come to mind first. 


Already know what FAFSA is? Skip ahead to the next paragraph. 


The FAFSA, or Free Application for Federal Student Aid, must be submitted for your child to apply for federal and state financial aid for college, such as federal grants, work-study programs, and student loans. This application must be submitted each year that your child will require financial assistance. College admissions officers recommend that you complete the FAFSA application even if your child may not need financial aid. Some private scholarships at certain colleges even require the submission of the FAFSA application. Each school that you have listed on the FAFSA will receive your financial information after you’ve completed the form. 


When it comes to preparing your child for college, it’s important to understand the FAFSA process and the steps you should take when submitting it. Here are the things you should keep in mind when submitting the FAFSA with your child.


Submit the FAFSA Early

While this isn’t common knowledge, financial aid is awarded on a first-come, first-served basis in some states, specifically when it comes to Federal Supplemental Educational Opportunity Grants (FSEOG grants) and federal work-study programs. Because of this, it’s important to find out your prospective or current college’s priority deadline and submit your FAFSA application before it. 


While filing after the priority deadline won’t impact your child’s eligibility to receive federal student loans, they may end up taking out more in student loans due to missing out on other federal aid and even money from the institution. You can start the FAFSA application here. Find out some other important reasons why completing the FAFSA early is critical.


Create Your Federal Student Aid (FSA) ID

The U.S Department of Education replaced the Federal Student Aid PIN with the FSA ID in 2015. Your FSA ID will be the username and password you will use to access certain federal student aid websites, including fafsa.gov, studentloans.gov, and even the myStudentAid mobile app


If your child is a dependent student and submits the FAFSA online, both you and your child will need to create an FSA ID. An FSA ID is required to sign the online FAFSA application, and you and your child cannot share an FSA ID since it serves as a signature and must be unique to each person. You can create your FSA ID here.


Use the FAFSA on the Web Worksheet

Before your child files the FAFSA online, it’s smart to check out the FAFSA on the Web Worksheet. This worksheet consists of the questions you’ll see on the FAFSA so you can know the information your child will need when filling it out. 


Keep in mind that the FAFSA on the web worksheet is not part of the FAFSA application and will not be submitted – it’s simply a helpful guide for knowing what to expect on the FAFSA so you can organize your information. The questions are listed in the same order as they appear on the website and the app.


Gather Your Documents

When filling out the FAFSA, your child will be asked for basic personal information as well as information about your family’s financial situation. Depending on your situation, you and your child may need the following documents while filling out the application: 


  • Your child’s driver’s license and Social Security card
  • Income tax returns from the prior-prior year
  • W-2 forms and other records of money earned
  • Current bank statements
  • Records and documentation of other untaxed income received such as welfare benefits, Social Security income, veteran’s benefits, AFDC, or military or clergy allowances
  • Records of stocks, bonds, mutual funds, and other investments
  • Current mortgage information
  • Business or farm records (if applicable)


Most of the above-mentioned steps can be completed before October 1st, which is the earliest your child can submit the FAFSA for the following academic year. By being prepared, you can help ensure that your child’s FAFSA will be filed on time so he can get as much aid as possible for your family’s financial situation. For more information on the FAFSA, check out our blog, “What is FAFSA? And Why You Should Care,” and watch our quick video, “FAFSA 101: What You Need to Know About Paying for College.”


While financial aid and grants are certainly helpful methods of paying for college, sometimes they don’t cover the complete cost of school, meaning that additional expenses will need to be covered out-of-pocket or through student loans. When considering applying for federal or private student loans, it’s important to look at the details to determine which type of student loan will be best for you and your child’s future. 


If you need assistance in working through your options, contact ELFI. We have years of experience devoted to helping students realize their college dreams, so don’t wait – give us a call today.*



*Subject to credit approval. Terms and conditions apply.

Should You Refinance Parent PLUS Loans?

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Parents spend their days and (sleepless) nights trying to create the best life for their children. We bake cookies for bake sales, we spoil them on their birthdays, we shuttle around town to dance classes and lacrosse games, and we even take out loans for them—big loans—to help them pay for college. So what happens when your baby is all grown up and graduated from college? You cry. You celebrate. Then you get to refinance your Parent PLUS Loan so you can put a little money back in the “Me” column of your budget.


Back up. What’s a Parent PLUS Loan?

Skip ahead if you’re already the proud owner of one of these loans.


A Parent PLUS Loan is a federal education loan taken out by parents to help pay for their child’s college tuition. The U.S. Department of Education actually offers Direct PLUS Loans to parents or graduate and professional students—the loan is simply called a Parent PLUS Loan when it’s made to a parent.


These loans are available to moms and dads of dependent undergraduate students and offer one way to pay for your dependent child’s college education. Parent PLUS Loans differ from other college loans because the parent assumes complete financial responsibility (i.e., if payments aren’t made on time, it affects the credit score of mom and/or dad). While some parents may be eager to help foot the bill for their child’s education, you should always explore private student loans, since Parent PLUS Loans come with origination fees while private student loans typically do not. You should also compare the interest rates on the Parent PLUS loans to rates offered by private student loan companies such as ELFI.1 When evaluating the costs of Parent PLUS loans vs private student loans, you should compare the annualized percentage rate, or APR, which includes both interest and origination fees. In addition, private lenders offer the ability to have your child/dependent be a co-signer on the loan whereas the Parent PLUS loan does not.


Options for Refinancing Parent PLUS Loans

Even though your child/dependent may not have graduated from college yet, you can lower your debt burden by taking advantage of refinancing your Parent PLUS loans (and private student loans) and potentially saving money by either lowering your interest rates and/or extending the term of your payment. The good news about refinancing Parent PLUS loans is that you can refinance the loans more than once, assuming you qualify. So you can refinance your Parent PLUS Loans at any time with a private lender even before your dependents/children graduate! If you have multiple Parent PLUS loans, you can combine them all, if economic, when your dependents/children graduate as well!


Even though Parent PLUS Loans are originated through the U.S. Department of Education, you can refinance them through a private lender. Refinancing your Parent PLUS Loans with ELFI1 could mean:

  • Lower Interest Rates
  • Different Interest Types (Variable1 vs Fixed)
  • One, Simple Payment
  • Choose a New Repayment Term Length


If you’re a parent who financially supported your child’s education through a Parent PLUS Loan, see if you qualify to refinance that Parent PLUS Loan or simply learn more about our Parent Loan Refinancing options. Refinancing could establish flexible repayment plans and competitive interest rates that could lower your monthly payments or total cost of the loan. ELFI Customers reported saving an average of $309 every month and an average of $20,936 in total savings after refinancing student loans with Education Loan Finance.2


If you’re considering refinancing your Parent PLUS loans and/or your private student loans, consider a refinanced Parent Loan from ELFI.1 ELFI provides parent loans with flexible payment terms of 5, 7, and 10 years and no penalties for paying them off early.1 You can refinance both your Parent PLUS loans and your private loans into a single private loan. Rest easy knowing you’ve secured a low-interest rate and chosen a repayment plan that’s tailored to fit your lifestyle.


1Subject to credit approval. Terms and conditions apply. The interest rate and monthly payment for variable rate loans may increase after closing. Your interest rate will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. To qualify for refinancing or student loan consolidation through Education Loan Finance, you must have at least $15,000 in qualified parent loan debt and the student must have earned a bachelor’s degree or higher from an approved post-secondary Education Loan Finance institution. Education Loan Finance Parent Loans are limited to a maximum of the 10-year term.


2Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors.


Note: Links to other websites are provided as a convenience only. A link does not imply SouthEast Bank’s sponsorship or approval of any other site. SouthEast Bank does not control the content of these sites.

Parent PLUS Loans and Cosigning Student Loans

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Updated January 22, 2020


It’s no secret that paying for college and graduate school can be expensive. Along with purchasing a home, receiving a degree or two from a higher education institution can be one of the most costly (yet rewarding) financial steps of a person’s life. For most traditional college students, this decision is made at an age where the magnitude of the financial implications is too abstract to grasp.  


Many students begin college around 18 years old, and with Forbes’ estimated average yearly tuition cost of $43,500 per year, funding often requires assistance in the form of student loans. Some students take out loans in their own names to pay back after graduation, but since annual loan limits in the federal program have not increased proportionately with rising tuition rates at many four-year colleges, parents often choose to help their children fill the financial aid gap with loans designed especially to supplement additional education costs. Parent PLUS loans or cosigning a loan are the top two options for parents looking to help fund a child’s college education – but what is the difference, and which is right for you?


Cosigning a Student Loan

Cosigning a loan makes both the parent and the child mutually responsible for repayment. While a student does not need a cosigner to qualify for most federal loans, having a parent cosigner increases the chances of being approved for private loans needed to meet the total cost of attendance. The parent is not solely responsible for the loan, but if the child defaults or fails to make timely payments, the parents are required to take responsibility or risk damaging their credit score. Some experts caution parents against cosigning student loans, but in some cases it may be necessary in order for the child to be approved by private lenders.


Parent PLUS Loans

A Parent PLUS Loan is simply a federal education loan taken out by parents to help pay for their child’s tuition. What makes it different from other student loans is that the parent assumes complete financial responsibility for the loan. In other words, if the payments are not made on time, it affects the credit score of the parent. While some parents may be eager to help foot the bill for their child’s education, it is recommended to take advantage of Direct Loans first before taking out a Parent PLUS Loan. PLUS loans typically involve higher interest rates and fees than Direct Loans, and there is no grace period — the repayment process begins as soon as the final disbursement is made. Parent PLUS Loans are available to the parents of dependent undergraduate students and offer one way to curtail the amount of debt that the child accumulates.


Which is the Right Move?

If you are a parent considering ways to help your child pay for college, it is crucial to understand the differences and financial implications of both options. Both Parent PLUS Loans and cosigning a loan carry varying degrees of financial risk, and both are options for parents who want to make sure their child is not taking on too much debt. However, remember that parents can always help pay for lower-cost loans that are solely in their child’s name, which may save everyone money. Ultimately, it is a personal choice that depends on the financial situation and preferences of the family.


Are you a parent who financially supported your child’s education through a Parent PLUS Loan? See what options are available for refinancing your loans into flexible repayment plans and competitive interest rates that could lower your monthly payments or total cost of the loan. This guide can help you decide if refinancing Parent PLUS Loans is right for you.



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*Subject to credit approval. Terms and conditions apply.