Finance Your children’s educational journey

As a parent, it's natural to want to do anything you can to help your child. So it's no surprise that some 3.6 million parents had outstanding loans through the federal student loan program at the end of 2019, according to a study by Trellis Research. If you're considering helping your child by taking out parent student loans, Below we’ve picked the best student loans for parents based on features including interest rates, origination fees and hardship repayment options.

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College AVE-Best for Private Parent Loans for College

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  • Min. Credit Score: 650
  • Fixed rate: 3.22-13.95%
  • Variable rate: 1.29-12.99%

If you’re confident that you’ll be able to work during the entire loan repayment term and that you won’t have any issues making the payments, then a private loan may be a better option than the federal one. The one we chose is the College Ave loan that allows both fixed and variable rates on student loans for parents. The fixed rates range from 2.94% to 12.99% whereas the variable rates range from 0.94% to 11.98%.

College Ave also offers a 0.25% rate discount after autopay enrollment and it doesn’t come with any prepayment penalties or origination fees, which is a great plus. Moreover, they offer plenty of options when it comes to loan repayment terms, including terms of 8. 10, and 15 years. When it comes to how much money you can borrow with this loan, the amount ranges from minimum $1000 all the way up to the certified cost of attendance for your kid’s school.

Competitive fixed and variable rates starting at 0.94%
0.25% interest rate reduction for automatic payments
Apply online in 3 minutes and get an instant credit decision
No origination, application and processing fees, no fees for early repayment
Multiple repayment options including: full principal and interest, interest-only, deferred, and flat payment
Borrow up to 100% of your school's cost of attendance
New private undergrad, graduate, and parent loans available
Specific loan products for medical, dental, law, and health professionals
No forgiveness plans that are available with federal loans.

Federal Parent Plus Loan-Best Federal Loan Option for Parents

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  • Min. Credit Score: None
  • Fixed rate: 6.28%
  • Variable rate: N/A

We’ll start off with the Federal Parent Plus Loan, which is the best option if you’re aiming for federal aid. Now, here’s the thing about federal loans: they usually have a higher interest rate compared to most private loan options because of the fact that federal repayment plans are much easier to follow through. On top of that, federal loans are eligible for forgiveness programs that take some of the weight off your shoulder in case you’re unable to repay the loan in the future.

If you want to have those forgiveness programs available, then a federal parent plus loan is a good option to consider. The loan’s interest rate equals around 5.3%. On top of that, there is an origination fee of around 4.2% as well. Keep in mind that these numbers may change as time goes on so make sure to check the exact rates before considering this loan. Finally, this type of loan allows you to borrow the amount of the cost of school’s attendance minus other financial aid you’re receiving.

Easier repayment plans
Eligible for forgiveness programs
High interest rates
You may need an endorser to be able to qualify if your credit score is not good enough.
There’s an origination fee.

Sallie Mae-Best for Private Parent Loans for College

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  • Min. Credit Score: 650
  • Fixed rate: 3.24-12.99%
  • Variable rate: 1.04-11.98%

Last but not least, we decided to include the Sallie Mae private loans to give you an additional option to look at. Similar to the College Ave loans, the Sallie Mae loans don’t have any origination fees or prepayment penalties, meaning that if you were to repay the loan earlier than the agreed term, you won’t have to pay an additional fee (as it is the case with many other lenders).

Sallie Mae also offers a 0.25% rate discount for autopay enrollment and their repayment terms range from 5 to 15 years. What makes them different from College Ave is that their loans are not only available to parents but also to other student benefactors. They also offer quarterly FICO credit score updates for free along with an option to make interest only payments while the student is enrolled.

No origination or prepayment fees.
Both fixed and variable rates available.
There’s an option to pay interest-only payments
5 to 15 years of repayment terms
No forgiveness plans that are available with federal loans.

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What Is a Parent PLUS Loan?

As we explained above, a Parent PLUS loan is a special type of college loan that’s issued to parents. If you’re looking for ways to finance your child’s education, then a parent PLUS loan may be a good option to consider. However, keep in mind that the Parent PLUS loans come with fees, unlike private loans offered by banks and private lenders. That is because these federal loans offer benefits in terms of easier repayment and forgiveness plans. You need to think carefully before deciding between a federal Parent PLUS loan and a private loan.

Don’t take out a federal Parent PLUS loan if:
Your financial situation is solid and you’re able to work during the entire loan term. If this is the case, then a private loan is a better option because you will get lower interest rates and thus spend less money.
Your child hasn’t yet maxed out their federal student loan options. Go for the student loans first and, if those aren’t enough to cover the expenses, then look into the Parent PLUS.
If you have high-interest debt such as credit cards that you need to repay, then taking out a federal loan may not be the best option for you.
Take out the parent PLUS loan if:
You’re not sure whether you will be able to work and have a steady income during the entirety of the loan term. In this case, a federal loan is a good option because it gives you a safety net in case you’re unable to make the payments.
If you don’t meet the private loan requirements, that is, if your credit score is not good enough to qualify for a private loan, then you may be able to get a federal loan instead.
If you are building your finances and don't meet private loan requirements, a PLUS loan is likely best for you as they don't have strict credit requirements.

Are You Eligible for a Parent PLUS Loan?

Unlike private loans, federal loans don’t have a credit score requirement, which makes it much easier to qualify. However, you still have to pass the credit check to make sure you don’t have an adverse credit history, meaning you don’t have any negative line items on your credit report (payments that are 90 days late or more).

Other requirements include the following:
You must be a parent.
Your child must be an undergraduate.
Both you and the student must be eligible for federal aid.

How to Apply for a Parent Loan?

Applying for a parent loan includes one additional step compared to regular student loan applications. First, you need to submit the Free Application for Federal Student Aid, known as FAFSA. Then, contact the child’s school to get further instructions, as the process may differ depending on the college procedures. In most cases, you will have to apply for a PLUS loan on

Go through the required credit check and make sure all your credit freezes are lifted before you initiate this process. Then proceed to submit your documentation on and wait to hear back from them. If your documentation checks out, you’ll be good to go. The approval process can take anywhere up to four weeks. Keep in mind that the application may differ depending on the school but, in most cases, you will be able to submit it online without much hassle.

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