parent's guide

The Parent's Guide to Student Loans

College tuition can lead to serious sticker shock — and it’s often too costly for your child to handle without your support.

Those steep price tags can cause parents to worry about how they’ll help their child afford tuition, while avoiding a mountain of debt for both themselves and their student.

Luckily there are many ways to help your child pay for college including taking advantage of federal and private parent loans.


Parent Loan Options:
Federal vs. Private

Refinance Parent Plus Loans

Federal Parent PLUS Loans

Federal Parent PLUS Loans are a popular tool to help your child afford college. They’re designed to fill in tuition funding gaps, while removing some financial strain from your child and taking on part of the debt yourself.

However, these loans have a fixed interest rate set by the government — no matter your credit score — and tend to have the highest rates and loan fees of any federal student loan.

For a full explanation of everything you need to know about Parent PLUS Loans, check out our definitive guide.

Refinance Private Parent Loans

Private Parent Loans

A useful alternative to Parent PLUS Loans are private parent loans, which are offered by financial institutions like banks, online lenders, and credit unions. These private lenders use credit-based interest rates, and qualified parents can save significantly on interest and costly loan fees when compared to the one-size-fits-all Parent PLUS loans.

Check your best private loan rates, options, and terms from top lenders — all with one fast form and no credit check needed.

Federal Student Loans for Your Child

Besides your parent loans, your child can also take out their own federal student loans. The first step to getting federal student loans is submitting the Free Application for Federal Student Aid or FAFSA.

Your child’s application will determine how much total federal financial aid they’re eligible for — which includes federal student loans. Because of their lower interest rates and repayment benefits, federal loans are the place to start when pursuing student loan support.

Here’s a comprehensive, step-by-step guide to the student loan application process.

Private student loans for your child

Private Student Loans for Your Child

After choosing your child’s federal student loans, you may find they still need more money to be able to afford tuition. That’s where private student loans can come in handy.

Private student loans — offered by private lenders like banks or other financial institutions — can be a smart solution to get extra financial help. However, since private loan rates and eligibility are based on credit, it can be difficult for students to qualify on their own.

Here’s what you need to know about cosigning your child’s loan.

Discover More Resources for Parents

All Paying for Your Child's College Tuition Parent PLUS Loans vs. Private Parent Loans Federal Student Loans for Your Child Private Student Loans for Your Child

Paying for Your Child’s College Tuition

Federal Student Loans for Your Child

Private Student Loans for Your Child

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How to Pay for College - FAQ

The Parent PLUS Loan program is a federal program offered by the U.S. Department of Education. These loans are available to the biological or adoptive parents of a dependent undergraduate student, who is enrolled at an eligible school at least half-time.

Depending on the cost of your child’s school and your own financial situation, Parent PLUS Loans can be an effective option for helping with college tuition. However, there could be even better alternatives available before turning to federal parent loans:

  • Undergraduate Federal Loans: Before taking out any loans, it’s essential to see if your child qualifies for financial aid, including federal loans, to cover their costs. These loans charger lower interest rates than Parent PLUS Loans. Plus, certain loan options have additional benefits – like subsidized loans, which the Department of Education pays the accruing interest on while your child is in school or deferment.
  • Private Parent Loans: These loans can be a great option for parents with a strong credit and income history. Through a private lender, you could qualify for a better interest rate than the standardized Parent PLUS Loan rate set by the government.

Before considering your options, your child should fill out the Free Application for Federal Student Aid, or FAFSA. This will determine their financial aid amount, and their eligibility for federal loans including both subsidized and unsubsidized loans.

Once you know the amount your child can receive from the government, you can make an informed decision on whether Parent PLUS Loans or private loans could be useful for additional financial support.

Parent PLUS Loans can be a useful solution to provide necessary funding for tuition. But if you have great credit and a steady income, it may be worth comparing private parent loans.

Depending on what you can qualify for, you may find that a private loan would give you:

  • A lower interest rate
  • More flexible loan terms
  • No application or origination fees

Parent PLUS Loans may be a better option for you than private loans if:

  • You have inconsistent income
  • You have poor credit
  • You plan on pursuing Public Service Loan Forgiveness