Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government, student loan lenders and others. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.
* * *
If you’re looking to help pay for your child’s college education, there are a variety of options to consider — including federal and private student loans for parents.
Here are our choices for the best parent student loans based on interest rates, fees and repayment terms, along with tips on how to make the best borrowing decision for you and your family. (See here for our methodology.)
1. Parent PLUS loan
2. Citizens Bank Student Loan for Parents
3. College Ave Parent Loan
4. Sallie Mae Parent Loan
5. Education Loan Finance (ELFI) Parent Loan
6. Rhode Island Student Loan Authority
7. ISL Education Lending College Family Loan
8. SoFi Parent Loan
9. Advantage Education Loan Parent Loan
10. INvestED Parent Loan
Plus:
10 best parent loans for college
Both the federal government and many private lenders offer parent loans for college. These loans can help fill any remaining gaps after exhausting other forms of funding, such as your family’s savings, a 529 plan, scholarships and grants and your child’s own student loans.
It’s wise to compare options since not all loans are created equally. Here are our 10 best parent loan options worth checking out:
1. Parent PLUS loan
- Loan amounts: Up to the cost of attendance of your child’s school, minus any other financial aid already received
- Fixed interest rate: 7.54% for loans disbursed from July 1, 2021, to July 1, 2023
- Variable interest rate: Not available
- Fees: 4.228% for loans disbursed from Oct.1, 2021, to Oct. 1, 2023
- Terms: 10 years for standard plan, 25 years for extended plan
- Repayment options: If you consolidate first, you can apply for an income-contingent repayment plan
- Eligibility: You must be the biological or adoptive parent of a dependent student who is enrolled at least half-time in an eligible undergraduate school. Borrowers with adverse credit have the option to apply with an endorser (can’t be your child), or to document the extenuating circumstances behind your recent credit history.
- Bonus feature: May be eligible for federal student loan forgiveness programs if certain criteria is met.
2. Citizens Bank Student Loan for Parents
- Loan amounts: $1,000 to $350,000, depending on type of degree
- Fixed interest rate: 3.74% to 7.68%
- Variable interest rate: 1.99% to 7.43%
- Fees: No origination, application or prepayment fees
- Terms: 20 years
- Repayment options: Immediate, interest-only or deferred payment options available, plus a rate discount of 0.25% when you automate your student loan payments. Discounts are also offered if you have any qualifying accounts with Citizens Bank.
- Eligibility: U.S. citizens with a dependent student enrolled at least half-time in a degree-earning program at an eligible institution. Borrower must pass a credit check or add a cosigner. International students may be able to apply with an eligible U.S. citizen as a cosigner.
- Bonus feature: Ability to potentially secure funding for future years with multiyear approval (not available for noncitizens or international students).
3. College Ave Parent Loan
- Loan amount: Up to 100% of the school-certified cost of attendance.
- Fixed interest rate: 3.34% to 12.99% (includes autopay discount)
- Variable interest rate: 1.04% to 11.98% (includes autopay discount)
- Fees: No origination, application or prepayment fees
- Terms: 15 years
- Repayment options: Lower in-school payments or immediate repayment options
- Eligibility: Available for parents, grandparents, guardians or any family member who wishes to help pay for a child’s college education. Approval is based on the borrower’s credit and income review.
- Bonus feature: Option to disburse up to $2,500 directly to the parent for additional out-of-pocket expenses.
4. Sallie Mae Parent Loan
- Loan amount: From $1,000 up to certified cost of attendance
- Fixed interest rate: 5.49% to 13.87% with autopay discount
- Variable interest rate: 3.37% to 12.99% with autopay discount
- Fees: No origination, application or prepayment fees
- Terms: 10 years
- Repayment options: Option to make immediate, interest-only or fixed ($25/month) payments on the loan, or to defer loan payments while the child is in school and for six months after they graduate
- Eligibility: The parent or guardian needs to apply as a cosigner and shares responsibility with the student. Students must be enrolled in a participating school, and below half-time enrollment is acceptable. Cosigner release is available after 12 months of regular payments and other criteria are met.
- Bonus feature: Free quarterly FICO credit score updates
5. Education Loan Finance (ELFI) Parent Loan
- Loan amount: From $1,000 up to certified cost of attendance
- Fixed interest rate: 2.43% to 5.99%
- Variable interest rate: 1.86% to 9.55%
- Fees: No origination, application or prepayment fees
- Terms: 5, 7 or 10 years
- Repayment options: Option to make immediate, interest-only or fixed ($25/month) payments on the loan, or to defer loan payments while the student is in school and for six months after they graduate
- Eligibility: Borrower and student must be U.S. citizens or residents. A parent, guardian or other family member can apply as long as they shared a home with the student for more than half of the year. The student needs to be enrolled at least half-time, and the borrower or cosigner must meet financial requirements.
- Bonus feature: A variable rate loan will never exceed the interest rate cap of 18% APR.
6. Rhode Island Student Loan Authority (RISLA)
- Loan amount: $1,500 to $45,000, but can’t exceed the cost of attendance minus other aid already received
- Fixed interest rate: 6.34% with autopay discount
- Variable interest rate: Not available
- Fees: No origination, application or prepayment fees
- Terms: 10 years
- Repayment options: Income-based and forbearance repayment options, as well as a forgiveness benefit for unfortunate incidents
- Eligibility: Student and borrower must be U.S. citizens or residents, with the student enrolled in an eligible degree-granting school. All borrowers must meet income and credit score criteria.
- Bonus feature: If approved, the multiyear program allows you to easily request funds each year as long as your credit score, income and other qualifying factors remain the same.
Rhode Island Student Loan Authority (RISLA)
7. ISL Education Lending College Family Loan
- Loan amount: Borrowers can take out as much as the student’s cost of attendance for school, subtracting any financial aid they receive
- Fixed interest rate: 3.19% to 7.40%
- Variable interest rate: Not available
- Fees: No origination, application or prepayment fees
- Terms: 10 or 15 years
- Repayment options: Immediate, interest-only or deferred until after graduation
- Eligibility: Available to U.S. citizens and residents (Maine and Oregon residents aren’t eligible). Students must be enrolled at least half-time in an eligible school and maintain satisfactory academic progress. The borrower must meet specific financial criteria.
- Bonus feature: 0.25% interest rate deduction for those who enroll in autopay
8. SoFi Parent Loan
- Loan amount: $1,000 up to 100% of all school-certified costs
- Fixed interest rate: 2.49% to 7.57% with autopay discount
- Variable interest rate: 1.74% to 7.57% with autopay discount
- Fees: No origination, application or prepayment fees
- Terms: 15 years
- Repayment options: Either interest-only or full payments required within 30 to 45 days of the loan’s disbursement
- Eligibility: Students must be enrolled at least half-time in a degree-seeking program at an eligible school. Anyone who meets the credit and financial requirements can apply — this loan isn’t limited to parents or family members.
- Bonus feature: In addition to the 0.25% autopay discount, SoFi offers an extra 0.25% rate discount for families supporting multiple kids in college.
9. Advantage Education Loan Parent Loan
- Loan amount: Up to 100% of school-certified expenses
- Fixed interest rate: 2.84% to 6.23% with autopay discount
- Variable interest rate: Not available
- Fees: No origination, application or prepayment fees
- Terms: 10 years
- Repayment options: Immediate, interest-only or deferred payment plans available
- Eligibility: Borrower needs to be a parent or stepparent of an eligible student, as well as a U.S. citizen or permanent resident. Must meet income and credit check criteria.
- Bonus feature: Offers death and disability benefits
10. INvestED Parent Loan
- Loan amount: $1,000 up to the cost of attendance minus other aid received
- Fixed interest rate: 5.99% to 9.42%
- Variable interest rate: 3.16% to 6.57% (capped at 21%)
- Fees: No origination, application or prepayment fees
- Terms: 5, 10 or 15 years
- Repayment options: Immediate payments that begin 30 to 60 days after the loan’s disbursement, as well as forbearance and deferment plans
- Eligibility: Must be an Indiana resident as well as citizen or permanent resident of the U.S. All borrowers must have established credit history and meet income criteria.
- Bonus feature: Offers 0.25% interest rate deduction for those who enroll in autopay
Things to consider when choosing a parent loan
As a parent, you can choose a federal or private student loan. While federal loans are usually a better option for students, it’s also a good idea to weigh the pros and cons of a federal PLUS loan before applying.
Since the parent PLUS loan interest rate tends to be higher than other federal student loans, you might be able to save money by applying for private parent loans instead, especially if you have strong credit. But here too, make sure you won’t need any of the special protections and benefits that federal loans have.
As with any financial product, you’ll need to shop around to find a good deal for your student loans for parents. Here are key features to consider when looking for the best parent loans for college:
Low student loan rates
When you’re choosing student loans for parents, interest rates are key. In order to make sure you’ll incur the least amount of debt possible, compare interest rates for both private and federal loans.
Low or no loan fees
Parent student loans can come with charges such as student loan origination fees. Watch out for these costs and make sure to compare annual percentage rates (APRs), which will reflect the full cost of the loan — including any fees. Note that, while private student loans are often advertised with APRs including any origination fee, rates for federal loans on the Federal Student Aid website do not include the origination fee, which is listed separately.
Student loans designed for parents
Allowing parents to cosign their children’s student loans is common. However, if you’re looking for a loan that won’t add to your child’s student debt, you’ll want to find lenders that offer loans directly to parents.
Eligibility requirements you can meet
Lastly, consider your creditworthiness. You’ll need a good credit score, reflecting a solid credit history and a low debt-to-income (DTI) ratio, to qualify for private student loans for parents. If you’re unlikely to qualify on your own, you might need to apply with a cosigner.
A similar rule applies to the parent PLUS loan. While you don’t need excellent credit, anyone with adverse credit won’t qualify unless they add an endorser to their application. (Read our report on adverse credit to find out what qualifies as “adverse”.)
How to decide if a parent student loan is right for you
In addition to shopping among private lenders, you should compare student loans for parents to other college financing options. Here are some questions to consider:
Is your credit good?
To figure out if you could benefit from private student loans for parents, consider your creditworthiness. The better your credit, the more likely it is that you’ll qualify for a parent loan — along with rates that are low enough to make them worth your while. If you don’t know your current credit score, you can quickly check it with free online credit check tools.
Typically, you’ll need good to excellent credit (a FICO Score of around 700 or higher) to get your best rates on parent student loans.
If you qualify for low rates, you could save a lot in loan fees and interest, especially if you can beat the interest rate and loan fee on parent PLUS loans.
If your FICO Score falls below that 700 benchmark, on the other hand, a parent PLUS loan might be a better choice. Parent PLUS loan eligibility requirements are easier to meet than most private lenders’ credit standards.
While private student loans require good credit, PLUS loans simply require that you don’t have “adverse credit” such as default, bankruptcy discharge, repossession, foreclosure, or wage garnishment within the last five years. (See above for more information.)
Even if you do have credit problems, it could be worth applying. If your parent PLUS loan is denied, the Federal Student Aid Office will allow your child to borrow more direct unsubsidized loans to help cover any gap in funding.
Can you afford to repay parent student loans?
Some parents choose to take out student loans to simplify the borrowing process and keep their child out of student debt.
Still, you should borrow responsibly and take on parent student loans only if you’re confident you can afford to repay them. Limit loan amounts as much as possible, and choose a student loan term that will result in affordable monthly payments.
Also, make sure you can continue to prioritize other important financial goals, such as saving for your retirement, alongside repaying student loans and covering college costs.
Are you and your child repaying student loans together?
Some parents might view repaying student loans as a responsibility their child should share. If that’s you, then cosigning a private student loan, rather than borrowing a parent loan, might make more sense. This way, both you and your student share equal legal responsibility for repaying the debt.
Many lenders offer cosigner release, meaning your child eventually could assume full responsibility for managing and repaying the cosigned loan. Between cosigning a student loan and taking out parent loans on your own, consider which is the better fit for your financial future.
Ultimately, student loans for parents allow borrowers to pay for college costs and control future repayment if necessary. By exploring your options for parent loans, you’ll know how to choose the borrowing option that’s right for you and your family.
Applying for parent loans FAQs
How do I apply for a parent PLUS loan?
You can easily apply for a parent PLUS loan on the Federal Student Aid website. (Check out our guide to the FSA website here.) You’ll need to complete your online application in a single session, but the entire process usually takes only about 20 minutes.
On the first page of the application, you’ll provide information about the student for whom you’re borrowing, as well as details on their school and the loan you want to borrow. Next, you’ll provide your own personal details and consent to a credit check.
As explained above, you may have to apply with an endorser if you have adverse credit. If you’ve placed a freeze on your credit, you’ll also need to remove it before your application can be processed.
Once your loan is approved, Federal Student Aid will send it directly to the school to cover expenses. If there’s a remaining balance, you can choose to have it sent to you or to the student.
How do I apply for a private parent loan?
To borrow a private parent loan, you’ll apply directly on the lender’s website. Before you submit your full application, however, we recommend checking your rates with a few lenders.
Many online lenders will let you prequalify for a loan, allowing you to browse offers with no impact on your credit. By comparing offers, you can find a loan with the best terms for you.
Once you’ve chosen your loan, you’ll fill out an online application, providing details about yourself, the student, the school and the loan amount. You’ll also need to consent to a hard credit inquiry and meet a lender’s criteria for credit and income.
Since each lender has its own process, check with yours to find out how the loan will be disbursed and what steps you’ll need to take to start repayment.
What are my repayment plan options?
Your repayment options will vary depending on the type of loan you borrowed.
Parent PLUS loans are eligible for a few different plans, including the standard 10-year plan, graduated repayment plan and extended repayment plan. You can also adjust payments on the income-contingent plan, but only if you consolidate your parent PLUS loan into a direct consolidation loan first.
If you opt for a private parent loan, you’ll typically choose your repayment plan when you initially borrow. Most lenders offer repayment terms between five and 10 or 15 years. Use a student loan payment calculator to estimate your monthly payments on each term.
What’s more, read your loan agreement carefully to find out when repayment begins. While some lenders let you defer payments while the student is in school, others expect you to start paying it back right away.
By offering an unbiased and comprehensive description of each lender’s rates and terms, Student Loan Hero can provide peace of mind when making a financial decision for your future. We chose student loans from private lenders that specifically service parents (or at least offer parent-cosigned student loans) when it comes to covering the cost of a post-secondary education.
Private student loan lenders were chosen based on the following criteria:
- Transparent rates and repayment terms
- Loan amounts large enough to cover college expenses
- No fees
- Easy application process (favoring online lenders)
After filtering for the qualities above, we selected lenders with competitive rates. Note that we rank federal parent PLUS loans first, due to the special protections and features described above.
