Best Parent Student Loans: November 2024

As a parent, it’s natural to want to support your child at different milestones of their life — including college. If you don’t have enough money set aside for college or income to help pay for tuition, there are student loans that you can take out as a parent to cover your child’s higher education costs. 

Read on to learn what to consider before borrowing and where to find the best parent student loans. 

Compare parent student loan rates

4 best parent student loans
 

Other parent loans to consider

SoFi parent student loans

SoFi is another parent student loan lender known for its generous member benefits. Its perks include no origination fees or late payment fees, as well as flexible repayment plans to fit your monthly budget. Members also have free access to financial planners in the SoFi network to assist with financial planning and budgeting. In addition, you can earn rewards for referring anyone in your network to SoFi. 

ISL College Family Loan

Iowa Student Loan Liquidity Corporation (ISL) is a nonprofit lender that offers a College Family Loan for parents and family members to help students fund their education. ISL is known for its competitive rates and flexible repayment options, which include immediate, interest-only, or deferred payments. Residents of all states except Maine can apply for an ISL parent loan.

Federal parent student loans 

In addition to private student loans for parents, the U.S. Department of Education offers parent PLUS loans for biological, adoptive, and in some cases, stepparents of dependent undergraduate students. Parent PLUS loans allow you to borrow up to the total cost of attendance of your child’s school, minus any other financial aid they receive. To qualify for these loans, you must pass an adverse credit check. 

Some advantages of parent PLUS loans include fixed interest rates and the ability to defer payments while your child is in school and for six months after graduation. You also gain access to federal benefits like forbearance. Note that interest continues to accrue during these periods.

On the other hand, if you have strong credit, exploring the private student loan market may offer better rates and terms, depending on your financial situation. 

Methodology

We evaluated these student loan lenders based on interest rates and origination fees, loan amounts, loan terms, discounts, whether cosigners are accepted, and more. Our team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

What to look for in parent student loans

If you’re considering taking out parent student loans, there are many important factors to review. Here’s what to look for to find the best parent student loans:

• Interest rates: Look at whether the loans have a fixed or variable rate. For private loans, look at the range available based on your credit score and see if you can prequalify to check your rate. The interest rate can have a major impact on the cost of the loan. 
• Fees: Do your research and check if there are application fees, origination fees, or any other fees associated with the loan. 
• Repayment terms: The length of time you have to repay student loans is called the repayment term. This affects both your monthly payment amount and how much interest accrues. Some private lenders may offer repayment terms starting at 5 years, while federal loans have repayment terms between 10 and 25 years, depending on the plan. 
• Repayment options: Review the various repayment options available. Are deferment and forbearance periods an option? Federal parent PLUS loan borrowers have fewer repayment options but can qualify for one income-driven repayment plan — the Income-Contingent Repayment (ICR) plan — after consolidating loans with a Direct Consolidation Loan. 
• Student loan forgiveness: Private student loans generally don’t offer any student loan forgiveness options. Federal parent PLUS loans can qualify for forgiveness if loans are consolidated and repaid under the ICR plan. For public service workers, the Public Service Loan Forgiveness (PSLF) program may be another option. 
• Borrower benefits: Consider if there are autopay discounts available or any other borrower benefits advertised.

Federal vs. private student loans for parents

Parents can apply for a parent PLUS loan through the U.S. Department of Education. Private parent student loans can be obtained through banks, online lenders, or other financial institutions. Here’s a quick overview of both options: 

Although parent PLUS loans offer parent borrowers fewer repayment options compared to student borrowers, there are still some notable benefits. 

Parents can access loan forgiveness if they take out a Direct Consolidation Loan to consolidate their parent PLUS loans. Once this happens, parents are eligible for ICR, which offers forgiveness after 25 years of repayment if there’s a remaining balance at that point. Eligible borrowers in public service may get forgiveness in just 10 years through PSLF. 

Private student loans for parents don’t come with forgiveness or income-based repayment options. Unlike federal PLUS loans that have fixed rates, private student loans may offer both fixed and variable rates. In some cases, you may qualify for lower interest rates, but you’ll have to weigh the costs, as private parent loans aren’t eligible for forgiveness.

Pros and cons of parent student loans

By taking out parent student loans, you’re helping your child pay for college. However, it’s important to review your financial situation before taking out loans so you can continue to prioritize other goals, like your retirement. 

Ideally, your child can take advantage of grants, scholarships, and federal loans first. Students typically have more repayment options and are eligible for student loan forgiveness under certain payment plans. 

But if you decide to take on some of the financial responsibility, be sure to consider the pros and cons. 

Pros of parent student loans

• Multiple options: If you’re looking for the best parent student loans, you have various options. You can compare parent PLUS loans from the Department of Education and loans from multiple private lenders. Based on your preference for fixed or variable rates, as well as repayment terms, you can choose the right loan for you. 
• Potential forgiveness: Taking out parent PLUS loans and consolidating through a Direct Consolidation Loan makes you eligible for the Income-Contingent Repayment (ICR) plan. This sets monthly payments at 20% of your discretionary income and can lead to forgiveness after 25 years of repayment. If you work in the public sector and pursue PSLF, the timeline for forgiveness is cut down to 10 years. 
• Higher borrowing limits: Parent PLUS loans and private parent loans allow you to borrow up to the cost of attendance of your child’s education (after financial aid is subtracted). Federal loans for undergraduate students have borrowing limits, so this can ensure you’re covered. 

Cons of parent student loans

• Fewer repayment options: Student borrowers have more federal repayment options, like the new Saving on a Valuable Education (SAVE) plan. Parent PLUS loans are unfortunately not eligible. Parent PLUS borrowers can access ICR with consolidation, but it’s the costliest income-driven repayment (IDR) plan. 
• Higher rates: The interest rates on parent PLUS loans are higher than rates for student borrowers. For private loans, the interest rates are dependent on your credit. If you have fair or bad credit, you may only qualify for higher rates. 
• Credit requirements: Both parent PLUS loans and private parent student loans require a credit check. However, they look at credit for different reasons. To qualify for PLUS loans, you must not have adverse credit actions on your record, such as a recent bankruptcy or default (however, there are exceptions to this rule). Your credit doesn’t impact rates since they are set by Congress each year. For private loans, your credit is reviewed as part of the eligibility requirements and to determine your interest rate. 

Related: How To Take Out a Student Loan: Everything You Need To Know

Alternatives to parent student loans

Taking out parent student loans may not be the best option, especially if it’ll impact your retirement and financial well-being. Some alternatives to consider include:

• 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 a student borrower, they’ll have access to more repayment plans. 
• Be a cosigner: You can cosign a private student loan for your child so that you help them get approved, but the loans are in their name. 
• Help make payments: If you want to help pay for your child’s education, you can agree to help them make student loan payments. That way, the student loans will be 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 the cost of attendance is pushing you toward parent student loans, consider a more affordable college. 

Related: How To Pay For College: 10 Strategies

Parent student loan FAQ

What is the best option for parents to pay for college?

Ideally, parents can help pay for college with a 529 savings plan or income and savings. If those aren’t options, parents can consider taking out parent student loans. There are parent PLUS loans available through the U.S. Department of Education and private parent loans through online lenders and financial institutions. 

Are parent PLUS loans forgiven after 10 years?

In general, parent PLUS loans aren’t forgiven after 10 years. If the borrower works in public service, forgiveness may be possible after 10 years through the Public Service Loan Forgiveness (PSLF) program. To qualify, parents must first consolidate their PLUS loans with a Direct Consolidation Loan. Then, the loan must be repaid under the Income-Contingent Repayment (ICR) plan. 

Can a parent PLUS loan be transferred to the student?

A parent PLUS loan taken out by a parent can’t be transferred to the child or student in college. Parents who take out PLUS loans are solely responsible for repayment. You may be able to transfer a PLUS loan to your child through the process of student loan refinancing. Keep in mind that refinancing federal loans through a private lender means losing access to federal protections and benefits.

Should the parent or student pay for college?

Parents who have sufficient income and savings can help pay for college for their children. If that’s not an option, students can apply for grants and scholarships, as well as take out federal student loans to help cover the cost of college. Student borrowers have more options than parent borrowers and have lower federal interest rate options.