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Best Parent Student Loans: Choosing Private or PLUS Loans

Parents have a few types of student loans to choose from, including federal Parent PLUS Loans and private student loans.

Author
By Angela Brown

Written by

Angela Brown

Freelance writer, Credible

Angela Brown is a student loan, personal finance, and real estate expert with more than six years of experience. Her work has been featured at LendingTree, FinanceBuzz, and Yahoo Finance.

Edited by Jared Hughes

Written by

Jared Hughes

Freelance writer, Credible

Jared Hughes has over eight years of experience in personal finance. He has provided insight to New York Post and and NewsBreak.

Updated September 27, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

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The cost of higher education continues to rise, and many students need help meeting education expenses. Since 1980, the price for tuition, fees, and room and board at four-year colleges has increased by nearly 175%, according to the National Center for Education Statistics. In the 2020-21 school year, students paid an average of $29,033 for their education.

If your child’s scholarship and grants aren’t enough to cover their full college costs, you may consider parent student loans.

Most students turn to federal student loans first, as they offer stable interest rates and unique benefits. But most federal student loans have borrowing limits, and your child may still face a funding shortfall. At that point, you may consider taking out a loan in your own name to help them out.

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
  • Private student loans

Cosigning a loan for your child may also be an option, especially if you have good credit. With a cosigned loan, your child is the primary borrower. You only become responsible for making payments if your child fails to do so.

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 certified cost of attendance (minus any other financial aid they’ve received) with a PLUS Loan.

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Keep in mind:

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.

Here are several important points to note if you’re considering a Parent PLUS Loan:

Interest rates (2022-23)
7.54%*
Loan amount
Cost of attendance minus any other financial aid received
Origination fee
4.228% (for loans disbursed on or after Oct. 1, 2022, and before Oct. 1, 2023)
Loan terms
  • 10 years under standard repayment plan
  • Up to 25 years under other repayment plans (extended, graduated, income-driven)
  • Up to 30 years through federal consolidation
Credit check required?
Yes
Deferment period
Until the dependent is no longer enrolled at least half-time
Grace period
6 months
[Federal student loan rates for the 2022-23 academic school year.]

3 of the best parent student loans

These three Credible partner lenders offer private student loans for parents:

Citizens

Credible rating

Min. Credit Score720
Fixed APR3.99 - 15.61%
Loan Amount$1,000 to $350,000 (depending on degree)
Term5, 10, 15
College Ave

Credible rating

Min. Credit ScoreDoes not disclose
Fixed APR3.47 - 17.99%
Loan Amount$1,000 up to 100% of the school-certified cost of attendance
Term5, 8, 10, 15 (20 for health professionals)
Read Our Review
Ascent

Credible rating

Min. Credit ScoreDoes not disclose
Fixed APR3.69 - 15.28%
Loan Amount$2,001* to $400,000
Term5, 7, 10, 12, 15, 20
Read Our Review

7 of the best parent cosigner student loans

Parent borrowers have a few options to help pay for their child’s college education, including both federal and private student loans. You might also be able to get a private student loan by cosigning a loan taken out by your child.

strong>Tip: It’s usually a good idea to take out federal student loans before private student loans. This is mainly because federal loans offer federal 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 keep in mind that a private loan won’t offer the same benefits of 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:

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