Best College Loans for Parents in May 2025

Paying for college can be a challenge for parents, and if your child needs financial help, you might consider taking out a student loan. Parent student loans can cover education costs when savings and income aren't enough. But the best parent loan option depends on your financial situation.

Federal parent PLUS loans come with flexible repayment plans and forgiveness options. They are a good choice when you need more borrowing flexibility. On the other hand, private parent loans can sometimes offer lower interest rates when you have strong credit and a high income.

College Ave is the best private parent student loan lender because of its competitive rates and flexible terms. However, there are other things to consider when comparing loan options.

Private student loan interest rates

What is a parent loan?

A parent loan is one a parent takes out to help pay for their child's college education when the costs exceed the student's financial aid package, which can include tuition, room and board, and other educational expenses. The parent, not the student, is responsible for repaying the loan.

Types of student loans for parents

Parents have two main loan options to help their children pay for college:

Federal parent PLUS loans

The U.S. Department of Education offers parent PLUS loans for biological, adoptive, and in some cases, stepparents of dependent undergraduate students. To qualify for these loans, you can't have an adverse credit history.

Private parent loans

Banks, credit unions, and online lenders offer student loans for parents to help cover their child's education costs. Eligibility requirements vary by lender, but a good credit score and stable income are usually required.

Best college loans for parents

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 student loan lenders for parents, 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. We assigned a score out of five stars to each lender based on our findings. 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.

Federal vs. private parent loans

Pros and cons of parent PLUS loans

Parent PLUS loans help you borrow up to the full cost of attendance minus other financial aid your child receives. They have federal benefits, including the option to defer payments while your child is in school and for six months after graduation. Plus, parents who work in the public sector may qualify for Public Service Loan Forgiveness. Parents with a lower income can be eligible for the Income-Contingent Repayment (ICR) Plan, which sets payments at 20% of their income and forgives the remaining balance after 25 years.

See Also: How To Apply for a Parent PLUS Loan

However, parent PLUS loans have higher interest rates than other federal student loans, which can make them more expensive in the long run. To qualify, you must also pass an adverse credit check, meaning you can't have certain negative marks on your credit report, like a loan default, bankruptcy, foreclosure, repossession, wage garnishment, or tax lien in the last five years.

Pros and cons of private parent loans

Private parent loans are a good option when you have excellent credit because you may qualify for a lower interest rate than with a federal parent PLUS loan. These loans also cover as much as the full cost of attendance at your child's school, minus other financial aid they receive.

However, private parent loans have fewer borrower protections and benefits. Unlike federal loans, private parent loans don't offer income-driven repayment or forgiveness programs. They can also be harder to qualify for since lenders set their own eligibility criteria, which are based on your credit score, income, and debt-to-income ratio.

How to compare parent loan options

When researching parent student loans, consider these important factors:

• Interest rates: Check whether the loan has a fixed or variable rate. For private loans, get an estimate of your rate by reviewing the rate range based on your credit, and learn if you can prequalify. Your interest rate will significantly impact the total cost of the loan.
• Fees: Look for application, origination, or other fees that could add to the cost of borrowing. Many private lenders don't charge origination fees, while federal parent PLUS loans do.
• Repayment terms: The repayment term affects your monthly payment and total interest costs. Federal loans offer terms from 10 to 25 years, while private lenders may have terms as short as 5 years.
• Student loan forgiveness: Federal parent PLUS loans can be eligible for forgiveness under the Income-Contingent Repayment (ICR) Plan after consolidating into a Direct Consolidation Loan. Public Service Loan Forgiveness (PSLF) may also be an option for parents working in the public sector. Private loans don't usually offer forgiveness.
• Borrower benefits: Some lenders offer perks like autopay discounts or temporary payment relief. Compare these benefits to know whether they add value.

Parent loan credit score

Your credit score plays a key role in determining the interest rate you qualify for on a private parent loan. The chart below shows the average rates for borrowers with different credit scores who used the Credible marketplace to find a lender.

Comparing these rates to the current 9.08% interest rate on federal parent PLUS loans can help you decide whether a private loan is a more affordable option based on your credit profile.

See Also: Student Loan Options for Parents With Bad Credit

Are there better options than parent PLUS loans?

Before taking out a parent student loan, consider whether it fits your financial goals, especially if it could impact your ability to save for retirement.

Ideally, your child should explore other funding options first, including grants, scholarships, and federal student loans, which offer more repayment flexibility and forgiveness programs.

Here are some alternative funding sources to consider:

• Have your child take out federal student loans: Your child can take out federal student loans by submitting the Free Application for Federal Student Aid (FAFSA). As student borrowers, they'll have access to more repayment plans.
• Be a cosigner: You can cosign a private student loan for your child to help them get approved, but the loan is in their name.
• Help with loan payments: When you want to pay for your child's college, you can make their student loan payments. That way, the student loans are in your child's name and not your legal responsibility, but you can still offer financial support.
• Choose a more affordable college: Some universities are more costly than others. If attendance costs push you toward parent student loans, consider a more affordable college, like an in-state public university, community college, or online college.