Best Parent Loans for College: Parent PLUS and Private
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Parents planning to borrow for a student's education have two options: Parent PLUS loans, which are federal student loans issued to parents, and private loans offered by banks and online lenders.
Here are our picks for the best parent student loans and information on financing your child's education.
- 35+ student loans lenders reviewed and rated by our team of experts.
- 10+ years of combined experience covering higher education and student loans.
- Objective, comprehensive star-rating system assessing 43 categories and 40+ data points across student loan origination and student loan refinance.
- Governed by NerdWallet's strict guidelines for editorial integrity.
- 35+ student loans lenders reviewed and rated by our team of experts.
- 10+ years of combined experience covering higher education and student loans.
- Objective, comprehensive star-rating system assessing 43 categories and 40+ data points across student loan origination and student loan refinance.
- Governed by NerdWallet's strict guidelines for editorial integrity.
Best Parent Loans for College: Parent PLUS and Private
Lender | NerdWallet Rating | Min. credit score | Fixed APR | Variable APR | Learn more |
|---|---|---|---|---|---|
5.0 /5 | None | 9.08-9.08% | N/A | ||
5.0 /5 | Mid-600s | 3.47-17.99% | 4.99-17.99% | Check rate on College Ave's website | |
4.0 /5 | 660 | 5.30-16.31% | 5.55-15.76% |
Our pick for
Federal loan option for parents
Federal parent PLUS loans have fixed interest rates and minimal fees. Parent borrowers must not have any adverse credit history to qualify.
Federal PLUS loans are available to parents of undergrads as well as graduate students. They are best for parents who may need the safety net they offer, like income-contingent repayment after consolidation, and for grad students who have hit limits on lower-interest unsubsidized loans.
- More flexible repayment options for struggling borrowers compared with private lenders.
- All borrowers who attend a school authorized to receive federal aid can qualify.
- May have higher interest rates compared with private lenders.
- You pay an origination fee.
- You can’t see if you’ll qualify without a hard credit check.
- Parent PLUS loan borrowers must not have adverse credit history.
- Borrowers with adverse credit history can still receive a parent PLUS loan by enlisting a co-signer without adverse credit history or documenting extenuating circumstances for their credit history.
- Loan amounts: Total cost of attendance minus other financial aid.
Our pick for
Private parent loans for college
College Ave Parent Student Loan
Mid-600s
3.47-17.99%
4.99-17.99%
Best for parents who want to help manage some of their student's spending.
- You can see if you’ll qualify and what rate you’ll get without a hard credit check.
- You can choose your monthly payment while the student is in school, provided it covers at least the interest.
- No co-signer option.
- Estate is still responsible for the loan if the parent borrower dies.
- Typical credit score of approved borrowers: Mid-700s.
- Minimum income: $70,000 per year.
- Loan amounts: $1,000 up to school-certified cost of attendance.
Ascent Parent Loan
660
5.30-16.31%
5.55-15.76%
- Offers loans to parents with students who are enrolled less than half-time.
- Allows bi-weekly payments via autopay.
- No co-signer option.
- The parent or borrower’s estate still has to cover loan payments if the parent borrower dies.
ISL Private Student Loan
660
3.95-8.01%
6.54-11.08%
Best for parents seeking low-interest loans with consumer-friendly features, like a generous forbearance policy.
- Forbearance of 24 months is longer than many lenders offer.
- No late fees.
- Only offers 2 loan terms.
- Typical credit score of approved borrowers or co-signers: 670.
- Minimum income: No minimum income.
- Loan amounts: $1,001 or $2,001, based on residency and school location, up to cost of attendance minus other aid received.
RISLA Private Student Loan
680
4.05-8.64%
N/A
Best for parents who want to reduce their child's debt levels.
- Income-based repayment plan available, with forgiveness after 25 years.
- You can see if you’ll qualify and what rate you’ll get without a hard credit check.
- Partial loan forgiveness for eligible internships; interest forgiveness for qualifying nurses.
- Fewer repayment terms available than other lenders.
- Typical credit score of approved borrowers: 768.
- Minimum income: $40,000.
- Loan amounts: $1,500 to $45,000.
Advantage Education Loan Parent Loan
Does not disclose
5.29-8.04%
N/A
Advantage Education Loans are fixed-rate loans with borrower-friendly features, such as no late fees and a generous amount of forbearance. These loans are from the nonprofit Kentucky Higher Education Student Loan Corp. and are available outside Kentucky, but not in every state.
- Forbearance of 24 months is twice as long as most lenders.
- Loans are available for students enrolled less than half time.
- Fewer repayment terms than other lenders offer.
- Estate is still responsible for the loan if the parent borrower dies.
- You can't see what rate you’ll get without a hard credit check.
- Typical credit score of approved borrowers: Does not disclose.
- Minimum income: Does not disclose.
- Loan amounts: Minimum $1,000. Maximum depends on creditworthiness and debt-to-income ratio.
SoFi Parent Loan
Mid-600s
5.74-15.99%
6.07-15.99%
- You can see if you’ll qualify and what rate you’ll get without a hard credit check.
- Multiple in-school repayment options available, including interest-only and flat-fee, and deferred for undergrad and grad students.
- Does not offer bi-weekly payments via autopay.
- Borrowers can finance undergraduate and graduate degree programs.
- Students do not have to attend college in Texas to qualify.
- Available only to parent borrowers in Texas.
- Typical credit score of approved borrowers: N/A
- Minimum income: $60,000 for co-signer or primary borrower, or $30,000 for primary borrower if applying with a co-signer.
- Loan amounts: $10,000 up to $400,000.
INvestED Student Loan
670
4.37-8.08%
6.11-9.91%
Best for Indiana residents, particularly parents with good credit and a strong credit history.
- Forbearance of 24 months is longer than many lenders offer.
- Interest rate reduction for autopay.
- You can’t see if you’ll qualify and what rate you’ll get without a hard credit check.
- You must be an Indiana resident or attend a school in the state to qualify.
- Typical credit score of approved borrowers or co-signers: 710.
- Minimum income: $39,996.
- Loan amounts: $1,001 up to annual cost of attendance.
What is a federal direct PLUS loan for parents?
Federal direct PLUS loans are government loans that parents can take out to help pay for a child's college education. They have higher interest rates and fees and qualify for fewer repayment plans than federal direct subsidized and unsubsidized loans for students.
How do parent PLUS loans work?
To be eligible for a parent PLUS loan, you’ll need to be a biological or adoptive parent of a dependent undergraduate student who is enrolled at least half-time in school. There are exceptions for stepparents, but grandparents do not qualify — even if they’ve raised the student — unless they have legally adopted the dependent student.
Are parent PLUS loans federal or private?
Parent PLUS loans are provided by the U.S. Department of Education, which makes them federal student loans. In contrast, private loans are given by entities such as banks and credit unions.
Can I get a parent PLUS loan with bad credit?
You will undergo a credit check when applying to parent PLUS loans. However, if you have adverse credit history there are options. You can find an endorser with good credit, which is a person who agrees to repay the loan if you do not. The child you are seeking funding for cannot be your endorser.
A second option is to provide documentation outlining extenuating circumstances for why you have adverse credit history. For either option, you’ll need to complete required credit counseling.
What is the interest rate for parent PLUS loans?
The interest rate for federal direct PLUS loans is 9.08% for the 2024-25 academic year. There is also an origination fee of 4.228% of the loan amount, which is deducted from each loan disbursement.
What is a private student loan?
Private student loans are provided by nonfederal lenders. This includes banks, credit unions, state agencies, among others. Terms and conditions for private student loans are set by each lender, whereas federal student loan terms are determined by law. Private student loans are often more expensive than federal loans.
» COMPARE: Best private student loans for college
What is better: A parent PLUS loan or private loan?
To help you assess if a parent PLUS loan or private loan is right for you, consider your current financial situation and employment outlook.
If your finances are secure and you expect your income to remain steady, you may qualify for a low rate on a private student loan. These loans also have no origination fees.
If your finances are solid, but you foresee future gaps in your income, a loan with relevant safety nets may be best. Parent PLUS loans offer an income-contingent repayment option and extend death and disability discharges to parent borrowers. Only some private loans offer income-based repayment or the death and disability discharge.
If you're building your finances and don't meet private loan requirements, a PLUS loan — which has looser credit requirements — is likely best for you.
Before taking parent student loans, make sure that:
Your child has maxed out federal student loan options.
You’re saving enough for retirement.
You’re managing high-interest debt like credit cards.
Assuming your child has exhausted federal student loan options and your finances are sound, consider a parent PLUS loan if:
You work for the government or a 501(c)(3) nonprofit and want to pursue Public Service Loan Forgiveness.
You may not have steady income for the duration of the loan term.
Your credit isn't strong enough to qualify for a lower rate with a private parent loan.
» MORE: Estimate monthly payments using a parent PLUS loan calculator
How to apply for parent PLUS loan
Plan to spend at least 20 minutes completing the parent PLUS loan application. It must be completed in a single session. However, you may need more time to gather up required documents and to complete the FAFSA first.
Fill out the Free Application for Federal Student Aid. To apply for a PLUS loan, fill out the FAFSA with your child. NerdWallet's FAFSA guide can help.
Check your credit. If you have a security freeze on your credit file, remove it from each credit bureau. Review your credit report for any errors, and do what you can to build your credit before you apply.
Complete the direct PLUS loan application for parents. You’ll need your verified FSA ID, your requested loan amount, school name, student information, personal information and employer’s information.
How to apply for private student loans
You can apply for a private parent student loan directly with the lender.
Shop around. Before signing up for a private parent loan, shop around to find the lowest student loan interest rate you qualify for. Also look for information on origination, prepayment or late fees, and how easily you can reach the lender if you have an issue.
Consider pre-qualifying. Some lenders have a pre-qualification process that allows you to see a personalized rate before the lender does a hard credit pull. This can give you an idea of which loans you may be eligible to receive before making any commitments.
Choose a fixed rate. Fixed interest rates do not change over time and are a better option over variable rates that may fluctuate throughout the lifespan of the loan.
Are parents responsible for student loans?
Parents are responsible for loan repayments. Make sure you and your child work out clear plans for repayment before taking a parent student loan since you are legally responsible for the debt.
What are repayment options for parent PLUS loans?
Parent PLUS borrowers have several repayment options. The first is the standard repayment plan, which is the one you’ll automatically get unless you specify otherwise. With the standard repayment plan, your payments are fixed for a term of up to 10 years.
Another option is the graduated repayment plan, which starts payments off low and increases them every two years. If your income is low at the start of the loan but you expect it to increase over time, the graduated repayment plan could be a helpful option.
A third option is the extended repayment plan, which gives you up to 25 years to repay the loan.
Are parent PLUS loans eligible for student loan forgiveness?
You may be eligible for student loan forgiveness under certain situations. For example, you could seek Public Service Loan Forgiveness, but you would need to first consolidate your loan into a direct consolidation loan and then enroll in an Income Contingent Repayment Plan (ICR).
Can a parent PLUS loan be transferred to the student?
A parent PLUS loan cannot be transferred from a parent to student. The only way to transfer parent loans is to have your child refinance the loan with a private lender in their name.
Last updated on November 18, 2024
NerdWallet's Best Parent Loans for College: Parent PLUS and Private
- Federal Parent PLUS Loan: Best for Federal loan option for parents
- College Ave Parent Student Loan: Best for Private parent loans for college
- Ascent Parent Loan: Best for Private parent loans for college
- ISL Private Student Loan: Best for Private parent loans for college
- RISLA Private Student Loan: Best for Private parent loans for college
- Advantage Education Loan Parent Loan: Best for Private parent loans for college
- SoFi Parent Loan: Best for Private parent loans for college
- Brazos Parent Loan: Best for Private parent loans for college
- INvestED Student Loan: Best for Private parent loans for college
