Best College Loans for Parents: Parent Plus and Private
Learn the key differences between federal and private student loans for parents. We’ve included our picks for the best parent student loans from private lenders.
Parents planning to borrow for a student's college expenses have two main options: parent PLUS loans, which are federal loans issued to parents, and private loans offered by online lenders and banks.
Before relying on a parent PLUS or private loan, make sure your child has maxed out their own federal student loan options. Then consider your financial situation, future employment status and long-term repayment goals to decide whether a parent PLUS loan or private parent loan makes more sense.
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Why trust NerdWallet
- 19 student loans lenders reviewed and rated by our team of experts.
- 10+ years of combined experience covering higher education and consumer lending.
- Objective, comprehensive star-rating system assessing 40 categories and more than 50 data points across student loan origination and student loan refinance.
- Governed by NerdWallet's strict guidelines for editorial integrity.
Best College Loans for Parents: Parent Plus and Private
Lender | NerdWallet editorial rating | Min. credit score | Fixed APR | Variable APR | Learn more |
|---|---|---|---|---|---|
5.0 /5 | Mid-600s | 2.39-17.99% | 3.89-17.99% | Check Rate on College Ave's website | |
4.5 /5 | Mid-600s | 5.75-17.51% | 5.05-16.01% | Check Rate on Ascent's website | |
5.0 /5 | Mid-600s | 3.87-16.73% | 5.70-16.73% | Check Rate on SoFi®'s website | |
4.0 /5 | 680 | 2.99-12.35% | 6.75-12.60% | Read Review on NerdWallet |
Our pick for
Private parent loans for college
- Typical credit score of approved borrowers: Upper 700s.
- Minimum income: $70,000.
- Loan amounts: $1,000 up to the cost of attendance.
- Offers customized loan terms of 5 to 15 years, or any year in between.
- Enables parents to transfer the loan to the student’s name through refinancing.
- Has monthly payment options of interest-only, interest plus a fixed amount (in increments of $20) or full principal and interest.
- Allows borrowers to pre-qualify with a soft credit check.
- No application, origination or prepayment fees.
- Parents can’t defer payments while the student is in school.
- Doesn’t offer loans to borrowers with a bankruptcy history.
Best for parents who want to help manage some of their student's spending.
- Typical credit score of approved borrowers: Does not disclose.
- Minimum income: $40,000 gross annual income.
- Loan amounts: $2,001–$200,000 for undergraduate; $2,001-$400,000 for graduate.
- Less than half-time enrollment accepted for parent loan.
- Offers a 0.50-percentage-point rate discount with automatic payments.
- Allows borrowers to pre-qualify with a soft credit check.
- No application, origination, prepayment or late fees.
- Interest rate tends to be slightly higher than some other providers of parent loans.
- You can see if you’ll qualify and what rate you’ll get without a hard credit check.
- Multiple in-school repayment options available, including interest-only and flat-fee, and deferred for undergrad and grad students.
- Does not offer bi-weekly payments via autopay.
- Typical credit score of approved borrowers: Does not disclose.
- Minimum income: $35,000.
- Loan amounts: $1,000 up to the cost of attendance.
- Enables parents to transfer the loan to the student’s name through refinancing.
- Allows borrowers to pre-qualify with a soft credit check.
- No application, origination or prepayment fees.
- Has a 0.25-percentage-point rate discount with automatic payments.
- Doesn’t offer co-signer release.
- Doesn’t have loans for students enrolled less than half time.
What is a federal direct PLUS loan for parents?
Parent PLUS loans are government loans that help parents pay for a child's college education. Compared to federal direct loans for students, parent PLUS loans have higher interest rates and fees.
As of July 1, 2026, parent PLUS loans have new borrowing caps and, like all federal student loans, more limited repayment options than in prior years.
To be eligible for a parent PLUS loan, you need to be a biological or adoptive parent of a dependent undergraduate student who is enrolled at least half-time in school. In some cases, stepparents are also eligible, but grandparents don’t qualify — even if they've raised the student — unless they have legally adopted the student.
What is a private student loan for parents?
Some banks, credit unions, state agencies and other companies that specifically offer private student loans also offer loans for parents. Terms and conditions for private student loans are set by each lender, whereas federal student loan terms are determined by law. Private student loans are often more expensive than federal loans.
How much can you borrow with a parent PLUS loan?
As of July 1, 2026, Parent PLUS loans have a new cap of $20,000 per year with a $65,000 aggregate limit per dependent student. This is a significant change from prior years, when parents could borrow up to the full cost of attendance with no annual or lifetime cap.
These limits apply per student, not per parent. If two parents borrow for the same child, their combined borrowing still cannot exceed $20,000 per year or $65,000 total.
At many colleges and universities, the total cost of attendance — including tuition, fees, room, board and supplies — can exceed these limits. Families who need more than the PLUS cap allows may need to look at private parent student loans or other funding sources.
If a student received a parent PLUS loan disbursement before July 1, 2026, while enrolled in a qualifying program, the parent may continue borrowing under the previous, uncapped limits for up to three more academic years, or until the student completes their program — whichever comes first.
MORE: Parent PLUS loan limits: guide to borrowing changes
What is the interest rate for parent PLUS loans?
The interest rate for federal direct PLUS loans is 9.07% for the 2026-27 academic year. There is also an origination fee of 4.228% of the loan amount, which is deducted from each loan disbursement. On a $20,000 loan, that means approximately $846 goes to this fee and not the student’s bill.
Interest rates on Parent PLUS loans are fixed for the life of the loan. Each academic year a new loan is taken out, that loan carries the rate set for that year.
Private student loans may have a fixed interest rate or a variable interest rate that can increase or decrease over the life of the loan. The annual percentage rate (APR) varies by lender. Also, many private lenders don’t charge origination fees for student loans.
What are repayment options for parent PLUS loans?
Repayment options for parent PLUS loans depend on when the loan was disbursed.
Loans disbursed on or after July 1, 2026
New Parent PLUS loans are only eligible for the tiered standard repayment plan. Under this plan, monthly payments are fixed — not based on your income — and the repayment term ranges from 10 to 25 years depending on your total loan balance. There is no income-driven repayment option and no forgiveness pathway for these loans.
Loans disbursed before July 1, 2026
If your parent PLUS loans were disbursed before July 1, 2026, and you consolidated them into a Direct Consolidation Loan before that date, you may still have access to income-driven repayment (IDR). It’s a multi-step process. You must first enroll in the Income-Contingent Repayment (ICR) plan and make at least one payment before July 1, 2028. You can then switch to an Income-Based Repayment plan (IBR).
However, if you take out any new federal loans on or after July 1, 2026, your parent PLUS loans and any consolidation loans that include them will lose access to IDR entirely.
MORE: Parent PLUS loan deferment: Do you have to pay right away?
Are parent PLUS loans eligible for student loan forgiveness?
Whether a parent PLUS loan is eligible for forgiveness also depends on when it was disbursed.
Loans disbursed on or after July 1, 2026
For borrowers of new parent PLUS loans, there is no forgiveness pathway. New PLUS loans are restricted to the tiered standard repayment plan, which does not qualify for Public Service Loan Forgiveness (PSLF) or any other forgiveness program.
Loans disbursed before July 1, 2026
If you have parent PLUS loans that were disbursed before July 1, 2026, you could still be eligible for PSLF. You would have had to consolidate into a Direct Consolidation Loan, enroll in ICR and switch to IBR. If you followed these steps, and you work for a qualifying government or nonprofit employer, you may still be eligible for forgiveness after 120 qualifying payments.
Which is better: A parent PLUS loan or private loan?
Choosing between a federal parent PLUS loan and a private parent loan depends on your credit profile, employment, financial stability and how much you need to borrow. The right choice depends on your specific situation.
Before taking out parent student loans, make sure that:
Your child has maxed out their own federal student loan options.
You're saving enough for retirement.
You're managing high-interest debt like credit cards.
Assuming your child has exhausted federal student loan options and your finances are sound, here's how the two options compare:
Consider a private parent loan if:
Your finances are secure and you expect your income to remain steady — you may qualify for a lower rate than a PLUS loan offers.
You want to avoid origination fees, which PLUS loans charge but private parent loans often don't.
You need to borrow more than $20,000 per year or $65,000 total, since those are the new caps on PLUS loans.
Consider a parent PLUS loan if:
Your credit isn't strong enough to qualify for a lower rate with a private lender — PLUS loans look at your credit history but don't have a minimum credit score requirement.
You may not have steady income for the duration of the loan term, and you want the safety net of deferment or forbearance.
Death and disability protections are important to you. PLUS loans cancel the debt if the parent borrower dies or becomes permanently disabled, or the student dies. Private lenders vary — some offer death discharge, but disability protection is rare and not guaranteed.
How to apply for a parent PLUS loan
Plan to spend at least 20 minutes completing the parent PLUS loan application. It must be completed in a single session. You may need more time to gather required documents when completing the FAFSA first.
If you haven’t already done so, fill out the Free Application for Federal Student Aid (FAFSA) with your child. NerdWallet's FAFSA Guide can help.
Check your credit and dispute any credit report errors. If you have a security freeze on your credit file, remove it from each credit bureau.
Complete the Direct PLUS Loan application for parents. You'll need your Federal Student Aid (FSA) ID, your requested loan amount, school name, student information, personal information and employer's information.
How to apply for private student loans
You can apply for a private parent student loan directly with the lender.
Shop lenders to find the lowest student loan interest rate you qualify for. Many lenders offer pre-qualification with a soft credit check, so you can see rate estimates without affecting your credit score. Also look for information on origination or other fees.
Choose a fixed rate, which won't change over time. Fixed interest rates provide more certainty than variable rates that may fluctuate throughout the life of the loan.
Compare loan terms and repayment options. Some private lenders offer more flexibility to fit your family’s budget and needs.
Last updated on July 1, 2026
Frequently asked questions
Are parents responsible for student loans?
Parents are responsible for student loan repayments in certain circumstances. If a parent takes out a federal direct parent PLUS loan to help pay for their child's college, the parent is the borrower and is solely responsible for repaying the loan.
Parents are legally responsible for repaying a private student loan only if they co-signed the loan or took it out in their name. Make sure you and your child work out clear plans for repayment before getting a parent student loan.
Can more than one parent take out a parent PLUS loan for the same student?
Yes. For example, if a student's biological or legal adoptive parents are divorced, each parent can take out a parent PLUS loan. Each parent must individually meet credit requirements and complete their own application.
However, the $20,000 annual cap and $65,000 aggregate cap apply per student — so the total combined borrowing across both parents cannot exceed those limits.
Can I get a parent PLUS loan with bad credit?
Applying for a parent PLUS loan requires a credit check, but having an adverse credit history doesn't automatically disqualify you. You can find an endorser with good credit, which is a person who agrees to repay the loan if you don’t. The child you’re seeking funding for can’t be your endorser.
A second option is to provide documentation outlining extenuating circumstances for why you have adverse credit history. For either option, you’ll need to complete required credit counseling.
Will getting a parent PLUS loan affect a parent's credit?
Yes, parent PLUS loans are reported to the credit bureaus under the parent borrower's name. Like other loans, missed payments or default can hurt your credit, while consistent on-time payments may help maintain or improve it.
Also, because these loans increase your total debt load, they can affect your debt-to-income ratio — something lenders consider when you apply for other forms of credit, such as a mortgage or auto loan.
Can a parent PLUS loan be transferred to the student?
A parent PLUS loan cannot be transferred from a parent to a student. The only way to transfer parent loans is to have your child refinance the loan with a private lender that will put the new loan in their name.
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NerdWallet's Best College Loans for Parents: Parent Plus and Private
- College Ave: Best for Private parent loans for college, Fixed APR: 2.39-17.99%
- Ascent: Best for Private parent loans for college, Fixed APR: 5.75-17.51%
- SoFi®: Best for Private parent loans for college, Fixed APR: 3.87-16.73%
- ELFI: Best for Private parent loans for college, Fixed APR: 2.99-12.35%