Best Parent Loans for College: Parent PLUS vs. Private Loans

Surveys consistently show that most parents want to help their children pay for college. But if you haven't been saving for years and don't earn enough to sign over a chunk of your income to tuition bills, that help may have to come in the form of taking on debt.

To choose which parent loan option is best for your family's situation, you must understand the differences between federal parent PLUS loans and private parent loans, particularly as the federal loan landscape shifts this year. Our guide below, which includes a list of top private lenders, can help.

Federal loans vs. private loans: How to choose

Students who are borrowing for their undergraduate education should always max out federal student loans before turning to the private market. (The annual federal loan limits vary, but in general, students under 24 can borrow up to $31,000 over the course of their undergraduate education.) For students, private loans are almost always more expensive, and they don't carry the same protections as federal loans.

For parent borrowers, though, the choice is less clear: Federal loans are easier to access, but private loans may be cheaper for borrowers with excellent credit.

Regardless of whether you go the federal or the private route, keep in mind that many financial planners caution parents against borrowing too much to pay for a kid's college degree. If your own finances aren't stable and you don't have much saved for retirement, you may want to consider reevaluating your plans to find a more affordable school that doesn't require taking on parent debt.

Parent PLUS loans vs. private student loans comparison

Here’s a quick side-by-side comparison of the two options. We cover them more in-depth in the sections below.

Federal parent PLUS loans are easy to access

Parent PLUS loans are offered by the U.S. Department of Education to the parents, adoptive parents and stepparents of eligible undergraduate students. They can cover education costs not paid for by other financial aid.

These loans require a very basic credit check that shows you don't have an "adverse" credit history — meaning you haven’t had delinquent debt accounts totaling more than $2,085 in the past two years and you haven’t had any bankruptcies, foreclosures, repossessions or defaults in the past five years. People with lower credit scores still qualify, which opens up borrowing to a wider range of families.

Parent PLUS loans have a fixed interest rate for the length of the loan — for the 2026-2027 school year, this is set at 9.07%. (As with all federal loans, the rates on parent PLUS loans are set once a year. Parent loans always carry a rate that is about two-and-a-half percentage points higher than the rate on undergraduate loans.) Federal parent loans also have a one-time fee that is similar to an origination fee. The fee is currently 4.228%, and it is subtracted from the requested loan amount.

To access parent PLUS loans, your student has to fill out the FAFSA. After getting a financial aid package from your student's college, you can use the online application for a parent PLUS loan or apply through your child's school's application process as specified. Read our full parent PLUS guide for more details.

What’s changing for parent PLUS loans in 2026?

The One Big Beautiful Bill Act (OBBBA) changes several aspects of federal loans for parents. Parents taking out PLUS loans after July 1, 2026, will see:

• A $20,000 annual limit per dependent student
• A $65,000 lifetime limit per student
• No access to income-driven repayment plans
• No access to Public Service Loan Forgiveness (PSLF)

In the past, parents could borrow up to the full cost of attendance for a child’s education without lifetime borrowing limits. There also wasn’t any measure of a parent’s ability to repay. Those policies made it easy to overborrow. The new limits add guardrails, but they’re still high enough that parents should map out a repayment plan before borrowing.

Paying back parent PLUS loans

Parent PLUS loans may be deferred as long as the student is in school at least half-time or for six months after graduation. Interest accrues during deferment, so making payments early can reduce your total cost.

The repayment options for parent PLUS are changing this year. Parents taking out loans after July 1 will have access to only one repayment plan, the so-called tiered standard plan. The plan has fixed monthly payments for between 10 and 25 years, depending on your principal balance. New parent borrowers also won’t qualify for PSLF because they won’t have access to PSLF-eligible repayment plans.

Borrowers who already have parent PLUS loans and do not borrow again will continue to have access to their existing plans (and can continue to pursue PSLF).

Finally, if you need a temporary break from your payments, you can request a forbearance from your loan servicer. Current rules allow for forbearance periods up to 12 months at a time, with a cumulative three-year limit. For loans issued after July 1, 2027, those limits shrink to nine months within a two-year period.

Who should take out a parent PLUS loan?

Federal parent loans are best for those who don’t have a "good" or "excellent" credit score that will allow them to qualify for lower rates in the private market. Be careful, though: Even with the new borrowing limits, it can be easy to take on more than you can realistically afford. Before borrowing, map out your expected four-year total and use a loan calculator to estimate the monthly payment. If that bill would strain your budget, you may need to consider a lower-cost college option.

Private parent loans may be cheaper for some

Private student loans are offered by banks, credit unions and online lenders that focus on college financing.

Parents who borrow on the private market have two possible routes: They can look for lenders that have a dedicated parent loan option, where only the parent’s name (and perhaps that of a cosigner) is on the loan, or they can cosign on a student loan and simply make the payments on behalf of their student. In the case of the latter, the loan will be tied to both the student and the parent.

Almost all lenders offer fixed- and variable-rate loans, and they typically offer repayment terms of between five and 15 years.

Private lenders set their own policies for hardship protections, and they'll handle requests for forbearance on a case-by-case basis. Most limit the time spent in forbearance to about three consecutive months, with a cumulative total of 12 months over the life of the loan.

Who should take out a private parent loan?

Parents with decent income and a strong credit score can save a significant amount of money in the private market as compared to PLUS loans. For example, if you can qualify for a 5% fixed rate, and you take out $20,000, you’ll owe about $212 a month on a 10-year term. Run those same numbers with a PLUS loan this year, and you’ll owe nearly $261 per month and end up paying about $5,400 more over the life of the loan in interest and fees.

That said, private lenders also charge much higher interest rates; several lenders are currently advertising max rates between 15% and 18%. If you can’t qualify for a private loan that undercuts the rates on PLUS loans, you should stick with the federal option.

Cosigning vs. borrowing on your own

Whether it would be better to cosign a student loan or take out your own parent loan depends on your priorities. If you’re looking to share responsibility with your student or would like to help them build up their credit history, cosigning may be the better fit. It may also be worth considering cosigning if you have specific needs that aren’t met by lenders that offer a dedicated parent loan. That could be the case if your student is pursuing something other than a four-year degree or if you value repayment flexibility and perks that are often more robust for student borrowers.

Another aspect to consider is when you’ll start making payments. If you cosign on a student loan, you’ll have the option to defer payments entirely while the student is enrolled. However, if you take on a parent loan, many lenders require immediate repayment — although they may offer options such as interest-only or flat monthly payments while your student is in school.

How to qualify for a private parent student loan

Lenders typically look at your credit score, salary and employment information and debt-to-income ratio to determine whether you meet their requirements. Most lenders require U.S. citizenship or permanent residency, and your student must be enrolled in an eligible school. (Approved schools may vary by lender, but they usually have to be an accredited institution.) Some lenders allow grandparents, guardians or other qualified sponsors to borrow on a student’s behalf.

Best parent loans for college: Top private lenders

If you decide private loans are the way to go, you’ll want to shop around to find the best deal. You should get a few offers to compare the rates you’re pre-approved for, but you’ll also want to consider details like repayment terms, forbearance or other hardship protections, and whether the lender has any unique perks that appeal to you. Here are some of the best private student loans for parents:

Ascent offers parents five repayment term options, ranging from five to 15 years, plus a 0.50% interest rate discount for setting up automatic payments. (Most lenders offer 0.25%.) Ascent doesn’t allow parent borrowers to fully defer payments while their student is enrolled, but they can choose to make interest-only payments during that time.

College Ave is Money’s pick for the Best Student Loan for Parents in part because of its customizable repayment term. Parents can choose between five and 15 years, which allows them to pick a term that best fits their budget. For borrowers with excellent credit and strong financial histories, College Ave may be a solid choice. The lender regularly offers some of the lowest starting APRs in the industry.

ELFI parent loans get the same repayment options as student loans, meaning you can elect to defer your payments while your student is in school, or you can choose to make payments that are interest-only, a flat $25 a month or full principal and interest.

ELFI has strong customer reviews, and each applicant is assigned to a student loan advisor who works with them through the application and disbursement process.

RISLA offers a separate parent loan product with very competitive rates. The lowest rates require a five-year term and immediate repayment. But even the longer terms and deferred repayment options offer competitive rates, with APRs maxing out at 8.77% — nearly half that of some other lenders.

RISLA, officially the Rhode Island Student Loan Authority, is unique in that it offers an income-based repayment plan for protection in the event of financial hardship.

Sallie Mae recently launched a dedicated parent loan that can be used to support a student’s undergraduate or graduate education. Sallie Mae is also a solid choice for parents who want to cosign a loan to help pay for something other than a degree, including loans for career training, medical residency, bar exams and more.

SoFi is regularly recognized for its member perks, which include financial coaching and estate planning. Borrowers can also redeem SoFi rewards points toward their loan. The lender gives a loyalty discount, meaning it could be a great option for parents who already have a SoFi account. SoFi limits payments to only interest-only or full principal and interest while the student is in school, but it does offer parents four repayment term lengths.

More from Money:

9 Essential Steps to Take Before Choosing a Private Student Loan

Everything You Need to Know About Student Loan Interest

7 Reasons Why Private Student Loans Are Riskier Than Federal Loans