Best Student Loans for Parents in January 2024
Updated: April 17, 2024
Advertising & Editorial Disclosure
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
College Ave Review
SoFi Review
Education Loan Finance (ELFI) Review
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.
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.
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.
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.
Repayment terms and options
The repayment term is how long the loan is. The longer it is, the more interest you’ll pay.
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.
Discounts
Some lenders offer discounts if you meet certain requirements, such as enabling autopay. These discounts will often apply to your interest rate.
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.
The parent or guardian who applies for the parent student loan is responsible for repaying it.
It depends on where you apply. Generally, however, you can fill out an online form on the lender’s site and provide the necessary documents or contact their customer service and get in touch with an agent.
No. Instead, students can apply for a standard student loan.
Yes, it’s possible to claim the interest paid, up to a limit of $2,500 per year.
It’s possible to have your Parent PLUS loan forgiven or discharged under certain circumstances.
If you’re having difficulty repaying your Parent PLUS loan, it’s possible to change your repayment plan, request a deferment or forbearance or lower the payments on your loan.
Parents can borrow up to the total cost of education under Parent PLUS loans, but for private lenders, this varies based on their maximum loan amount.
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.
sources
- Federal Student Aid. "Federal Student Aid." Accessed December 6, 2022.
- Federal Student Aid. "Parent PLUS Loans." Accessed December 6, 2022.
- IRS. "Topic No. 456 Student Loan Interest Deduction." Accessed December 6, 2022.
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