Financial Aid FAQ's : What Parents Need to Know

Navigating the Financial Aid (FA) process for your child's education can feel overwhelming, but having the right information makes all the difference. Whether you're wondering about FAFSA deadlines, eligibility requirements, or how to maximize aid opportunities, this Financial Aid Parent FAQ put together by University of Advancing Technology's (UAT) Director of Financial Aid is here to help.

Start your FAFSA today! UAT School Code 017188
Why do I need to complete the FAFSA if my student lives on their own?

For federal financial aid purposes, students under the age of 25 are generally considered dependent students, regardless of whether they live independently. This means parental information is required on the FAFSA® (Free Application for Federal Student Aid) to determine eligibility for federal grants, loans, and work-study programs.
Completing the FAFSA ensures your student is considered for the maximum amount of financial aid available.

Why should I complete the Parent PLUS Loan application if I expect to be denied or cannot afford the payments?

Submitting a Parent PLUS Loan application can still benefit your student, even if you anticipate denial or choose not to borrow.

If approved: You are not required to accept the loan, but it provides the option to cover remaining educational costs.
If denied: Your student may become eligible for additional Federal Unsubsidized Loan funds per semester, increasing their aid without requiring parent repayment.

Completing the application helps your student access all available federal funding options.

What are the eligibility requirements for a Parent PLUS Loan?

To qualify for a Federal Parent PLUS Loan, the borrower must:

Be the biological or adoptive parent of a dependent student
Have a student enrolled at least half-time at an eligible institution
Be a U.S. citizen or eligible non-citizen
Meet general federal student aid eligibility requirements
Have a credit history without adverse events

What are the disadvantages of a Parent PLUS Loan?

While Parent PLUS Loans offer flexibility, there are important considerations:

Limited discharge options: These loans are rarely discharged due to financial hardship, illness, unemployment, or bankruptcy.
Non-transferable: The loan cannot be transferred to the student after graduation. Families may refinance through a private lender in the student’s name, but doing so removes federal repayment protections.
Long-term financial impact: Repayment often occurs later in life when income may be reduced. Default can result in wage garnishment, tax refund offsets, or Social Security garnishment.

Why should I consider a Parent PLUS Loan?

Parent PLUS Loans can be a viable alternative to private student loans because they offer:

Federal repayment options
Income-driven repayment eligibility (after consolidation)
Deferment and forbearance opportunities

However, interest rates and fees may be higher than other federal loan options, and default consequences are significant. Families should carefully weigh costs and repayment responsibilities.

Who can claim the interest paid on a Parent PLUS Loan for tax purposes?

We are not tax professionals and recommend consulting a qualified tax advisor. In general, the parent borrower may be eligible to claim the student loan interest deduction, depending on income limits and individual tax circumstances.

Can my name be removed from a Parent PLUS Loan?

Federal Parent PLUS Loans cannot be transferred to the student. However, one option is private loan refinancing:

The student applies for a new private loan in their own name
The new loan pays off the Parent PLUS Loan
The student becomes solely responsible for repayment

Approval depends on the student’s creditworthiness and may result in the loss of federal loan protections.

Looking for more information? Check out our other FA Resources:

University of Advancing Technology's Official Technology Blog