Best Student Loans for Parents in 2024

A parent loan is meant to help fund a child’s higher education. Compared to standard student loans, a parent loan is taken out by a parent or guardian who often has a better-established financial history and can qualify for higher loan amounts and better rates. This also means that the repayment and liability fall solely on the parent or guardian.

There are two types of parent loans for college: federal and private. To qualify for either, parents must be the legal guardian of the student and have a suitable financial history.

MoneyGeek analyzed more than 30 private loan lenders to find the best student loans for parents. We used more than 35 individual data points across six categories (loan affordability, accessibility, consumer friendliness, customer service, flexibility and lender transparency) to rank each lender.

Federal Parent PLUS Loan


  • Federal Parent PLUS Loan

    The best student loan for parents seeking a low interest rate.


    • Starts at 7.54%Fixed APR Range
    • Not SpecifiedVariable APR Range
    • Up to the total cost of attendanceLoan Amount Range
    • OptionalCo-signer

    Parent PLUS Loan is a type of federal loan that can allow parents to cover the gap in their child’s college funding. It allows parents of undergraduate students (not applicable for graduate students) to borrow up to the cost of attendance if other types of aid are exhausted.

    Parent PLUS loans have a number of benefits. It comes with a fixed interest rate, flexible repayment plans, deferred repayment until after graduation and even comes with an opportunity for loan forgiveness. However, like traditional loans, Parent PLUS loans require a credit check and come with a high loan fee of 4.228%.

    Generally, however, parent PLUS loans are more advantageous compared to private student loans. This is due to their low-interest nature and the chance to have the loan forgiven.

    Pros

    • Offers up to the total cost of education
    • Offers the option to defer payments
    • Allows for loan forgiveness if certain requirements are met
    • Offers flexible repayment plans
    • Has tax-deductible interest

    Cons

    • Requires a loan fee of 4.228%
    • Accrues interest during deferment
    • May not accept parents with an adverse credit history
    Federal Parent PLUS Loan

College Ave Review


  • College Ave

    Best for parents who want to borrow up to the total cost of education.


    • 3.89% - 17.99%Fixed APR Range
    • 5.59% - 17.99%Variable APR Range
    • $1,000 minimum, no maximumLoan Amount Range
    • Not requiredCo-signer

    Founded in 2014, College Ave is an online student loan lender. It offers different student loan products in all states and the District of Columbia. It also offers student loan refinancing. Parents or guardians can also borrow money to fund their children’s education.

    You can borrow from $1,000 up to the total cost of school tuition/attendance. Depending on the student loan type and term, you may have an APR as low as 1.19%. There are also different repayment options to choose from, making it easy to stay on budget.

    If you choose automatic payments, you can enjoy a 0.25% interest rate reduction. College Ave borrowers can choose to release their co-signers after completing half of the original repayment term. Additionally, College Ave offers loan forgiveness in the event of permanent disability or death.

    The company requires students to make satisfactory academic progress. College Ave checks that requirement is met with the school. Also, borrowers who make late payments are charged a fee, which is based on the monthly payment amount.

    Pros

    • Doesn’t require any origination fees
    • Doesn’t have a prepayment penalty
    • Offers up to 100% of the cost of education
    • Has a discount for automatic payments
    • Offers flexible repayment terms

    Cons

    • Funding depends on the school and may take up to 10 business days
    • Offers loans only to students in an eligible school
    • Requires students to meet satisfactory academic progress (SAP) by school
    College Ave

SoFi Review


  • SoFi

    • 3.22%–11.16%Fixed APR Range
    • 1.10%–11.68%Variable APR Range
    • $5,000 minimum, no maximumLoan Amount Range
    • OptionalCo-signer

    SoFi, founded in 2011, started offering student loan refinancing in 2012. It was the first company to offer the refinancing of both federal and private student loans. Since then, it has funded over $50 billion in loans.

    SoFi offers several different financial products, including student loans. Depending on your needs, you can choose an undergraduate, graduate, law or MBA loan. SoFi also offers student loan refinancing. Parents and sponsors can also take out a loan to finance their student’s education.

    If you choose to make automated payments, you can get a 0.25% discount on your interest rate. If you or your co-signer is already a SoFi member, you can also enjoy a 0.13% interest rate reduction. Additionally, you can earn and redeem rewards points by using the SoFi app. Student loans in good standing that are at least nine months old may also apply for unemployment protection assistance, which may lower monthly payments in the event of unemployment.

    SoFi is a great option for individuals looking to finance the total cost of attendance in school. That said, there is a minimum loan amount of $5,000. If you need a lower amount, you may want to explore other options.

    Pros

    • Borrow up to the total cost of your education
    • No origination fees
    • No prepayment penalties
    • No late payment or insufficient funds fees

    Cons

    • $1,000 minimum loan amount
    • Two to ten weeks funds processing
    • 13.13% maximum variable APR
    SoFi

Education Loan Finance (ELFI) Review


  • Education Loan Finance (ELFI)

    Best for parents with an excellent credit score.


    • From 3.20%Fixed APR Range
    • From 1.20%Variable APR Range
    • Minimum of $1,000Loan Amount Range
    • U.S. citizen or permanent residentCo-signer

    Launched in 2015, Education Loan Finance Inc. (ELFI) is the student loan-focused division of the SouthEast bank, based in Tennessee. Its goal is to provide simple payment options for students with a transparent and secure application process.

    ELFI offers parent student loans and refinancing options, allowing parents to support their child’s future. The company boasts no application, origination or prepayment penalties — plus a dedicated Student Advisor to help borrowers through the process. Its services are available in all 50 states, Washington, D.C. and even Puerto Rico.

    Interested parents can go through a prequalification process, which only involves a soft credit check. On top of that, the company offers borrowers flexible terms from 5, 7 and 10 years with interest rates starting at 2.69% for variable and 3.21% for fixed APRs. However, rates can change based on the term of the loan, the borrower’s financial history and more.

    Pros

    • Doesn’t require any loan fees (application, origination or prepayment penalty)
    • Allows for parent loan refinancing
    • Offers flexible payment terms up to 10 years
    • Lets borrowers prequalify with a soft credit inquiry
    • Assigns a dedicated student loan advisor

    Cons

    • Requires high credit score
    • No cosigner release option
    • Minimum annual income of $35,000 required
    Education Loan Finance (ELFI)

Factors to Consider When Choosing a Parent Loan

Choosing a parent student loan requires a thorough analysis of your options. After all, a loan is a serious financial decision. There are a few factors to consider when evaluating a parent student loan.

1
Student loan fees

This involves the additional fees, such as a late payment fee, origination fee (or loan fee, for federal loans) and prepayment penalty fees. These can stack up if you’re not mindful of them.

2
Eligibility requirements

A parent student loan is only meant for parents, guardians and step parents, but this can still vary depending on the lender. On top of this, you must also meet certain financial criteria.

3
Interest rates

Next to the loan term, the interest rate dictates the overall cost of the loan. Ideally, the interest rate should be low and the term should be manageable.

4
Repayment terms and options

The repayment term is how long the loan is. The longer it is, the more interest you’ll pay.

5
Co-signer release options

If you have a co-signer, having a release option allows them to be free of liability after a certain period of time. Not all lenders offer this.

6
Discounts

Some lenders offer discounts if you meet certain requirements, such as enabling autopay. These discounts will often apply to your interest rate.

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HOW WE REVIEWED PRIVATE STUDENT LOAN LENDERS

We reviewed more than 30 private student loan lenders using 35+ individual data points across six key categories: loan affordability, accessibility, consumer friendliness, customer service, flexibility and lender transparency.

Within each ranking criteria category, we considered several individual data points that carry the most weight when choosing a private student loan lender. These factors include APR ranges, available loan amount, minimum credit score, minimum income amount, application fees and disbursement time.

With the consumer in mind, we also factor in each lender’s customer support, business ratings and additional features that could make your experience easier and more accessible — like pre-qualification, payment options and mobile apps.

Frequently Asked Questions About Parent Loans

Student loans for parents are less complicated thanks to their existing financial history. Understand more about how they work through our answers to the most frequently asked questions.

Who pays for a parent loan?
How do I apply for a parent loan?
Can a student take out a parent loan?
Can you claim a Parent Plus Loan on taxes?
Will Parent PLUS loans be forgiven?
What happens if I can’t pay my Parent PLUS loans?
What is the maximum amount parents can borrow?

We reviewed more than 30 private student loan lenders using 35+ individual data points across six key categories: loan affordability, accessibility, consumer friendliness, customer service, flexibility and lender transparency.

Within each ranking criteria category, we considered several individual data points that we feel carry the most weight when choosing a private student loan lender. These factors include APR ranges, available loan amount, minimum credit score, minimum income amount, application fees and disbursement time.

Here at MoneyGeek, we value you, the consumer, so we also factor in each lender’s customer support, business ratings and additional features that could make your experience easier and more accessible — like prequalification, payment options and mobile apps.

After careful consideration and calculation, our picks are decided and chosen with your best interest in mind. Our personal loan recommendations and expert tips are meant to help you make the best decision when choosing a lender that meets your needs.

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About Christopher Boston


Christopher Boston headshot

Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.


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