Private College Student Loan

How exactly do Parent Direct Plus Loans work?

I am planning on taking out a $2,200 loan for summer school. How does the interest work? The interest rate is 7.9%. Does the 7.9% affect only the $2,200 loan or the total sum? I plan on taking out a Stafford loan in the Fall Quarter in order to pay off the Direct Loan because I am worried about the accruing interest. Help?

Public Comments

1. Whoa, wait a minute. Are you the parent or the student? A parent plus loan is when a PARENT takes out a loan for the student. Not the student takes out a loan for themselves from the parent. If you are the student, you have to talk to your parents or legal guadian to see if they are willing to take out a loan to pay for you education. Those are some of the higher interest rates, and you should take out a stafford loan in your name to save your parents money.
2. The interest only accrues on the principal balance (2200), unless it is ever in a deferment or forbearance, then the unpaid interest will be added on to the principal, and interest will start to accrue on that as well.