Credible takeaways
- Parent PLUS loans are federal loans that a parent takes out directly to help their child pay for college.
- Parent loans are available from many private lenders, though not all.
- Parent PLUS loans can't be transferred to the student, but a student can refinance the loan in their own name.
The cost of higher education continues to rise, and many students need help meeting education expenses. In the 2022-23 school year, bachelor's degree recipients graduated with an average of $29,300 in student debt, according to the College Board.
If your child's scholarships and grants aren't enough to cover their full college costs, you may consider parent student loans.
It's typically best to turn to federal student loans first since they offer low, fixed interest rates and access to special benefits, such as income-driven repayment plans. However, most federal student loans come with borrowing limits, and your child may need more funding to cover the cost of college. In that scenario, you may want to take out a loan on their behalf.
Current private student loan rates
This article covers both parent PLUS and private parent loans so you can determine which is the best option for you.
What are parent student loans?
A parent student loan is a loan for which a parent is the primary borrower, and the borrower uses the funds to help pay for their child's education. You can choose from two types of parent student loans: federal parent PLUS loans and private student loans.
“If you have strong credit, I recommend cosigning a loan for your child instead of taking out a parent loan. This way, your child builds credit in their name while still benefiting from your credit profile. Just keep in mind that as a cosigner, you're responsible for payments if they miss any.”
— Renee Fleck, Student Loans Editor, Credible
What is a federal parent PLUS loan?
A parent PLUS loan is a type of federal student loan available to parents who want to help pay for their child's education expenses. PLUS loans have higher interest rates in comparison to other federal loans.
Unlike other federal loans that come with lower student loan limits, you can borrow up to your child's school-certified cost of attendance (minus any other financial aid they've received) with a PLUS loan.
Keep in mind:
Parent PLUS loans require a credit check. If you have an adverse credit history — such as a recent credit default or bankruptcy — you might be denied without an endorser.
These are several important points to note if you're considering a parent PLUS loan:
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8 of the best parent student loans
Parent borrowers have a few options to help pay for their child's college education, including both federal and private student loans. For private student loans, you can take out a parent student loan or cosign a loan taken out by your child.
Tip:
It's usually a good idea to take out federal student loans before private student loans. This is mainly because federal loans offer certain protections, including access to income-driven repayment plans and student loan forgiveness programs.
However, depending on your credit, you might get a lower interest rate on a private student loan compared to a federal parent PLUS loan. Just remember that a private loan won't offer the same benefits as a PLUS loan.
If you decide to take out a private student loan, it's important to consider as many lenders as you can to find a loan that suits the needs of both you and your child. Here are Credible's partner lenders that offer private student loans to parents — either directly or through cosigning:
Ascent
Through Ascent, parents can borrow a loan directly or cosign a loan taken out by an undergraduate student. With an Ascent cosigned loan, your child can borrow between $2,001 and $200,000 (aggregate limit) unless they live in Massachusetts, where the loan minimum is $6,0001. Parents can borrow up to the school-certified cost of attendance.
Potential discounts include a 0.25% autopay discount and a 1% cashback graduation reward.
Advertiser Disclosure
We receive compensation from the companies below if you purchase a product. Amount of compensation does not impact the ranking or placement of a particular product. Not all available financial products and offers from all financial institutions have been reviewed by this website. This content is not provided by Credible or any of the Providers on the Credible website. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Credible.
Ascent: Best for No-Cosigner Loans
To determine the best student loan companies, Credible evaluated lenders based on several different categories, including: rates and fees, loan terms, eligibility, repayment options, and customer support. We assigned a score out of five stars to each lender based on our findings.
Read our full methodology.
Min. Credit Score
Does not disclose
Fixed APR
2.89 - 14.93%
Variable APR
4.34 - 15.00%
Loan Amount
$2,001 to $400,000
Term
5, 7, 10, 12, 15, 20
Expert Insights
Ascent stands out for offering private student loans to students without a cosigner and who have limited credit. Its outcomes-based loan uses factors such as academic performance and graduation timeline instead of credit to determine eligibility. Students can also qualify for a cash-back graduation reward and choose from a wide range of repayment plans.
Citizens
Citizens offers undergraduate student loans (that parents can cosign) from $1,000 to $225,000 with five-, 10- or 15-year terms. You also have the option to take out a parent student loan with either a five- or 10-year term.
If you already have an account with Citizens, you might qualify for a loyalty discount of 0.25 percentage points — and you could get another discount of 0.25 percentage points by signing up for automatic payments.
Advertiser Disclosure
We receive compensation from the companies below if you purchase a product. Amount of compensation does not impact the ranking or placement of a particular product. Not all available financial products and offers from all financial institutions have been reviewed by this website. This content is not provided by Credible or any of the Providers on the Credible website. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Credible.
Citizens: Best for Multiyear Approval
To determine the best student loan companies, Credible evaluated lenders based on several different categories, including: rates and fees, loan terms, eligibility, repayment options, and customer support. We assigned a score out of five stars to each lender based on our findings.
Read our full methodology.
Min. Credit Score
640
Fixed APR
3.24 - 14.99%
Variable APR
4.99 - 15.47%
Loan Amount
$1,000 to $400,000 (depending on degree)
Term
5, 10, 15
Expert Insights
Citizens could be a great fit for borrowers who already bank with the lender and want to save more on their student loans. Customers can lower their interest rate by 0.25 percentage points with a loyalty discount, and by another 0.25 percentage points for enrolling in autopay. Citizens also offers multiyear approval, making it easier to get additional loans without repeated hard credit checks.
College Ave
College Ave offers student loans from $1,000 up to your child's school-certified cost of attendance (minus other financial aid your child has received). Parents can borrow the same amount through a parent student loan.
The lender offers both fixed and variable rates, as well as up to four different repayment plans (depending on the loan type).
Advertiser Disclosure
We receive compensation from the companies below if you purchase a product. Amount of compensation does not impact the ranking or placement of a particular product. Not all available financial products and offers from all financial institutions have been reviewed by this website. This content is not provided by Credible or any of the Providers on the Credible website. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Credible.
College Ave: Best for Extended Grace Periods
To determine the best student loan companies, Credible evaluated lenders based on several different categories, including: rates and fees, loan terms, eligibility, repayment options, and customer support. We assigned a score out of five stars to each lender based on our findings.
Read our full methodology.
Min. Credit Score
Does not disclose
Fixed APR
2.89 - 17.99%
Variable APR
4.24 - 17.99%
Loan Amount
$1,000 up to 100% of the school-certified cost of attendance
Term
5, 8, 10, 15 (20 for health professionals)
Expert Insights
College Ave offers a wide range of borrower-controlled features that makes it especially compelling for those who want predictability and planning power with their student loans. From 5 to 20-year terms and multiple in-school payment options to profession-specific grace periods, College Ave offers more structure and flexibility than many of its competitors.
INvestEd
If you live in Indiana, you might qualify for a parent student loan from INvestEd. You also have the option to cosign a student loan from INvestEd if your child lives in or attends school in Indiana.
INvestEd loans range from $1,001 up to 100% of your child's cost of attendance (minus any other aid they've received) if the school is in Indiana. For Indiana residents who attend college in a different state, the minimum loan amount is $2,001.
Advertiser Disclosure
We receive compensation from the companies below if you purchase a product. Amount of compensation does not impact the ranking or placement of a particular product. Not all available financial products and offers from all financial institutions have been reviewed by this website. This content is not provided by Credible or any of the Providers on the Credible website. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Credible.
INvested: Best for Indiana Students
To determine the best student loan companies, Credible evaluated lenders based on several different categories, including: rates and fees, loan terms, eligibility, repayment options, and customer support. We assigned a score out of five stars to each lender based on our findings.
Read our full methodology.
Min. Credit Score
670
Fixed APR
4.59 - 8.59%
Variable APR
6.74 - 10.79%
Loan Amount
$1,001 up to 100% of school certified cost of attendance
Term
5, 10, 15
Expert Insights
INvestEd offers unique value for Indiana students, with eligibility limited to state residents or those attending school in the state. This includes competitive interest rates, cosigner release after just 12 on-time payments, and generous forbearance and deferment options. As a nonprofit, INvestEd combines affordability with a strong commitment to local borrowers.
SoFi
With SoFi, you can take out a parent loan directly or cosign your child's loan. SoFi shines when it comes to borrower perks, as it offers unique benefits like free financial planning advice, networking events, and referral bonuses. Plus, SoFi doesn't charge any fees — even late or insufficient funds fees.
Advertiser Disclosure
We receive compensation from the companies below if you purchase a product. Amount of compensation does not impact the ranking or placement of a particular product. Not all available financial products and offers from all financial institutions have been reviewed by this website. This content is not provided by Credible or any of the Providers on the Credible website. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Credible.
SoFi: Best for Member Perks
To determine the best student loan companies, Credible evaluated lenders based on several different categories, including: rates and fees, loan terms, eligibility, repayment options, and customer support. We assigned a score out of five stars to each lender based on our findings.
Read our full methodology.
Min. Credit Score
Does not disclose
Fixed APR
-
Variable APR
-
Loan Amount
$1,000 to $100,000
Term
5, 7, 10, 15
Expert Insights
SoFi offers borrower-friendly benefits rarely seen among student loan lenders. Perks include cash back for strong grades, a loyalty discount on future loans, and cosigner release after just 12 months. With flexible terms and competitive rates, SoFi is a standout option for students seeking long-term value.
Nelnet Bank
Nelnet Bank offers competitive interest rates on both parent loans and cosigned student loans. The lender doesn't charge an origination fee and offers a discount when you enroll in autopay. If you do cosign your child's loan, you can be removed later through cosigner release, and your child has a choice between multiple repayment plans.
Advertiser Disclosure
We receive compensation from the companies below if you purchase a product. Amount of compensation does not impact the ranking or placement of a particular product. Not all available financial products and offers from all financial institutions have been reviewed by this website. This content is not provided by Credible or any of the Providers on the Credible website. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Credible.
Nelnet Bank: Best for Competitive Rates
To determine the best student loan companies, Credible evaluated lenders based on several different categories, including: rates and fees, loan terms, eligibility, repayment options, and customer support. We assigned a score out of five stars to each lender based on our findings.
Read our full methodology.
Min. Credit Score
Mid to high 600’s FICO
Fixed APR
-
Variable APR
-
Loan Amount
$1,000 to $500,000
Term
5, 10, 15
Expert Insights
Nelnet Bank stands out among private student loan lenders for offering low starting rates and high loan limits across undergraduate, graduate, and health professional programs. You can qualify for a Nelnet Bank student loan with mid-600s credit or apply with a cosigner to improve your chances of approval and secure a better rate.
Sallie Mae
Sallie Mae allows you to cosign a loan for your child, and it offers a relatively short time frame for cosigner release at just 12 months. The cosigned loan comes with a choice between interest-only, fixed, or deferred payments, and there's no origination fee.
Advertiser Disclosure
We receive compensation from the companies below if you purchase a product. Amount of compensation does not impact the ranking or placement of a particular product. Not all available financial products and offers from all financial institutions have been reviewed by this website. This content is not provided by Credible or any of the Providers on the Credible website. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Credible.
Sallie Mae: Best for Specialized Loans
To determine the best student loan companies, Credible evaluated lenders based on several different categories, including: rates and fees, loan terms, eligibility, repayment options, and customer support. We assigned a score out of five stars to each lender based on our findings.
Read our full methodology.
Min. Credit Score
Does not disclose
Fixed APR
2.89 - 17.49%
Variable APR
4.37 - 16.99%
Loan Amount
$1,000 up to 100% of school-certified cost of attendance
Term
10 - 20
Expert Insights
Sallie Mae stands out from the competition with one of the broadest selections of specialized private student loans on the market. Loans cover everything from undergraduate degrees to medical residencies, bar study, flight training, and trade schools. This makes Sallie Mae a good option for students pursuing specialized or less traditional educational paths.
ELFI
With ELFI, you can take out either a fixed or variable parent loan starting at $1,000. The lender offers flexible repayment plans, and parents can also choose to cosign their child's loan. One unique benefit of taking out a loan with ELFI is that each customer is paired with a student loan adviser who can help every step of the way with the application process.
Advertiser Disclosure
We receive compensation from the companies below if you purchase a product. Amount of compensation does not impact the ranking or placement of a particular product. Not all available financial products and offers from all financial institutions have been reviewed by this website. This content is not provided by Credible or any of the Providers on the Credible website. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Credible.
ELFI: Best for flexible repayment
To determine the best student loan companies, Credible evaluated lenders based on several different categories, including: rates and fees, loan terms, eligibility, repayment options, and customer support. We assigned a score out of five stars to each lender based on our findings.
Read our full methodology.
Min. Credit Score
680
Fixed APR
2.99 - 14.22%
Variable APR
5.00 - 13.97%
Loan Amount
$1,000 up to cost of attendance
Term
5, 7, 10, 15
Expert Insights
ELFI stands out for offering a broad range of repayment terms — 5, 7, 10, or 15 years — so you can tailor your loan to fit your budget and timeline. Whether you want to pay off your loan quickly or stretch payments over time, ELFI gives you the tools to choose. This flexibility makes it a strong option if you're seeking maximum control over your repayment plan.
Why you can trust our Credible experts
The Credible editorial team is independent and unbiased. Partners do not influence our editorial content. To help you find the best student loan for your situation, we conduct thorough research and analyze thousands of lender data points. Using data-driven methodologies, we score criteria that are important to you. This allows us to objectively rank student loan lenders and products. To learn more, read our methodology below.
Methodology
To determine the best parent student loan lenders, Credible collected more than 1,000 points of data on two dozen companies and evaluated them on several different categories: repayment options, eligibility, interest rates, loan terms, and customer support. Based on our findings, we assigned a score out of five stars to each lender. Below are the weightings assigned to the general categories for the best student loan companies — which comprise individual criteria that are also weighted.
- Repayment options: 30%
- Eligibility: 25%
- Interest rates: 20%
- Loan terms: 15%
- Customer support: 10%
While the best lender for you will depend on your unique needs and financial circumstances, these findings should help answer your questions and assist you in your search for the best student loan.
Learn more about our methodology.
Parent PLUS loans vs. private parent loans vs. cosigned loans
Here are a few factors to keep in mind when comparing parent PLUS loans, private parent loans, and cosigned loans:
You can apply for a parent PLUS loan on the StudentAid.gov website. Before you apply, make sure your child has already completed the Free Application for Federal Student Aid (FAFSA). For private parent loans, you can apply online with the lender you choose.
No matter which type of student loan you choose, it's important to consider how much that loan will cost you in the future. This way, you can prepare for any added expenses. You can find out how much you'll owe over the life of your federal or private student loans using Credible's student loan calculator.
Should a parent or a student take out a private student loan?
“Before making the decision to take out a private student loan of any kind, the parent should first make sure they don't need access to any federal student loan programs available to parent PLUS loans, such as Public Service Loan Forgiveness (PSLF), income-driven repayment plans, or disability discharge if the parent is at risk of being permanently disabled,” says Ryan Galiotto, a certified student loan professional (CSLP) and founder of Student Loans Gotta Go.
“If you decide to take out a private student loan, you'll want to consider the financial responsibility of the child. If you cosign and the child stops making payments, this could have an adverse impact on [your] credit score. In that case, it may make sense for the parent to own the debt entirely,” he adds.
“However, if they feel the child will maintain the payments, it might be wise to then be a cosigner to help the child qualify for the best lending terms. If the parent is cosigning, check with the lender about any cosigner release programs they offer. Some lenders will release a cosigner after two to four years of on-time payments by the child.”
Here's an overview of the reasons why a parent student loan could be a better option:
- The student isn’t responsible for payments: If the parent plans on paying the entire loan balance, a parent loan could be more convenient. You can work directly with the lender to choose a repayment plan that suits your needs.
- The student avoids debt: Taking out a parent loan could help prevent the student from going into debt, as well as help them focus on other goals.
- Parents might qualify for better rates: Parents are generally able to meet credit and income requirements more easily than students. This could help you qualify for a good interest rate.
Here are a few advantages for a student to take out a loan with a parent cosigner:
- The student might qualify for more discounts: Some lenders provide exclusive rate discounts to students. For example, Ascent offers a 1% cash-back graduation reward.
- The student is responsible for loan payments: Because the student is responsible for making monthly loan payments, parents can focus on saving for retirement and other financial priorities. However, remember that if your child can’t keep up with payments, the cosigner will be on the hook.
- More repayment options available to student borrowers: Student borrowers sometimes have more repayment options, such as longer repayment terms or deferred payments while in school.
How to qualify for a private student loan
Eligibility criteria for private student loans vary by lender. But there are a few common requirements you’ll likely come across, including:
- Good credit: You’ll typically need good-to-excellent credit to qualify for a private student loan. Having good credit could also help you secure a better interest rate. While some lenders offer student loans for bad credit, these typically come with higher interest rates compared to good-credit loans.
- Verifiable income: Lenders want to see that you’ll be able to repay the loan. Some lenders have specific minimum income requirements while others don’t — but in either case, the lender will generally ask to see proof of income.
- Low debt-to-income ratio: Your debt-to-income ratio (DTI) is the amount of debt you owe compared to your income. You’ll generally need a DTI lower than 50% — though some lenders might require lower percentages.
How to apply for a private student loan to cover school and living expenses
If you’re ready to apply for a private student loan, follow these four steps:
- Complete the FAFSA: Your first step should be filling out the Free Application for Federal Student Aid (FAFSA). The school will use the student’s FAFSA results to determine what federal student loans and other federal financial aid they qualify for.
- Apply for grants and scholarships: Unlike student loans, grants and scholarships don’t have to be repaid — which essentially makes them free money for school. There’s no limit on how many college grants and scholarships you can get, so it’s a good idea for students to apply for as many as they possibly can.
- Accept federal student loans: If you need to borrow for school, it’s usually a good idea to start with federal student loans so you’ll have access to federal benefits and protections. There are several types of federal student loans that students might qualify for. Additionally, parents can apply for parent PLUS loans to fund their child’s education.
- Use private student loans to fill any gaps: After exhausting grant, scholarship, and federal student loan options, private student loans could fill any financial gaps left over. For example, private student loans could help cover education costs like tuition, textbooks, or living expenses.
If you decide to take out a private student loan, be sure to consider as many lenders as possible to find the right loan for you — whether it’s a parent loan or a cosigned loan. This is easy with Credible. You can compare your prequalified rates from multiple lenders in two minutes.
Compare student loan rates from top lenders
See Your RatesHow to get the best parent student loan rate
Congress sets federal student loan rates each year. For the 2024-25 academic year, parent PLUS loans have an interest rate of 9.08%.
On the other hand, individual lenders set private student loan rates based on market conditions. Also, keep in mind that other factors will affect the actual rates you're offered, such as your credit score and the repayment term you choose.
A couple of strategies might help you qualify for a better rate on a private loan, including:
- Apply with a cosigner: If you have poor or fair credit, applying with a cosigner with good credit could improve your chances of getting approved. Even if you don't need a cosigner to qualify, having one might get you a lower rate than you'd get on your own.
- Compare lenders: Shopping around and comparing your options with as many lenders as possible can help you find a loan with the most optimal rate for your needs.
FAQ
Should I choose a private loan or a parent PLUS loan?
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Can I transfer a parent PLUS loan to my child?
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Can parent PLUS loans be forgiven?
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Do all private lenders offer parent loans?
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Is the student or parent responsible for the payments on a parent PLUS loan?
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