Best Parent Student Loans: Parent PLUS and Private of July 2026
Parents who want to take out a loan to pay for their child’s college expenses have two main choices: a Parent PLUS loan or a private parent student loan. Both are student loans for parents, but they have important distinctions.
- Parent PLUS loan: A type of direct PLUS loan, it comes from the federal government. It offers a fixed interest rate, and new loans made on or after July 1, 2026 have a choice of two repayment plans. Borrowing limits are set at the school’s cost of attendance minus financial aid. The Parent PLUS interest rate for the 2026-27 school year is 9.07%.
- Private loan: Offered by banks, credit unions and other lenders, private loans can have fixed or variable interest rates, various repayment terms and higher borrowing limits.
Some people like Parent PLUS loans because they come from the government and are more widely available to those with fair credit. Also, Parent PLUS loans may have more protections: Borrowers with loans made on or before July 1, 2027, are still able to take advantage of economic hardship and unemployment deferments. They can also take forbearance up to 12 months at a time until July 2027.
Others prefer private loans because they provide more flexibility in terms of how much you can borrow and how long you have to pay it back. For those with excellent credit, private loans may also offer lower interest rates.
You can read our in-depth comparison of Parent PLUS loans vs. private parent loans to determine which is best for you.
However, be aware that in some situations, private loans may be your only option. For instance, if you are a grandparent, you are not eligible to take out a Parent PLUS loan, even if you raised your grandchild. Parent PLUS loans are also not available for graduate studies.
Before you start shopping around for parent loans, it’s important to consider whether borrowing money is the right decision.
“Parents need to think about how the additional parent debt impacts their own financial goals,” says Matthew Carpenter, chief revenue officer at College Aid Pro. “Will this harm plans for retirement, their daily lifestyle or household budget? What is the likelihood of a return on the investment?”
Also, because parent student loans tend to be more expensive than undergraduate student loans, it may make more sense to have your child apply for student loans, says Travis Hornsby, founder and CEO of Student Loan Planner. Once your student receives the financial aid award letter, you may choose to borrow through parent loans to cover the gap.
Before you begin applying for student loans for parents, take the following preliminary steps.
- Check your credit score. A high credit score and a low debt-to-income ratio are key to qualifying for the best interest rates private student loan companies have to offer. If you can manage to score a lower interest rate than what the federal government offers, it could save you big time. But if your credit is average, Parent PLUS Loans may give you a better offer.
- Shop around. If you’re considering private loans, it’s crucial that you take the time to compare rates from several lenders. Remember, different lenders can have different interest rate ranges, and they may also differ in how they underwrite applications. The good news is that you can get prequalified with multiple lenders to get rate quotes and there’s no hard credit check or commitment involved.
- Think ahead. Even if you can score a lower interest rate on a private loan, it might not be the right fit. “Where private loans may have lower rates overall, they are the least flexible in repayment terms,” says Carpenter. “Federal loans may have higher interest rates – not always – but they offer the most flexibility in repayment terms, which helps to protect the borrower in case of job loss or another unplanned event.”
How to Apply for a Parent PLUS Loan
To apply for a Parent PLUS loan, first fill out the FAFSA with your child. Then fill out a separate application for a Parent PLUS Loan.
Always apply for federal loans before applying for private loans, just to understand your federal financial aid options.
How to Apply for Private Parent Loans for College
Many private lenders of student loans have a similar process.
SoFi – which received the 2025 U.S. News Money Award for Best Private Student Loan for Parents – has an online application process that can be completed in minutes. You’ll need to provide your Social Security number, a government ID, proof of income, school information and the requested loan amount. Once prequalified, you’ll select your rate and repayment terms before signing the loan paperwork.
If you are applying for a private loan from a bank or credit union, you may be able to apply in person as well.
Once you’ve completed the process, the private lender may choose to send the loan funds directly to you or disburse them to your child’s school. You’ll typically start making payments immediately.
By refinancing, it’s possible to transfer parent student loan debt to the child after graduation, says Hornsby. “This is an option that a lot of parents and their children do,” he adds. “You can transfer the loan by having your child refinance it into their name as long as they have good credit history and are able to make the student loan payments.”
Because of the responsibility associated with parent student loans, it’s crucial that you consider how taking one out can impact your financial well-being, both now and in the future.
- Grants. If your child filled out the FAFSA, they may qualify based on financial need. Grants don’t need to be repaid.
- Scholarships. Based on merit and achievement, this type of gift aid can give your child a good amount of financial help.
- Work-study. If your child can work while in school, look into work-study programs. To be eligible, your student must complete the FAFSA.
- Federal student loans. Unsubsidized and subsidized loans may not cover the entire amount of your child’s education, but they can bring the cost down. Your student must fill out the FAFSA to see if they qualify. And as a parent, your name won’t be attached to the debt.
- Private student loans. Your child can apply for these, but you may need to cosign if your student doesn’t have a job or good credit.
- Home equity loan. If you have enough equity in your home and can qualify, a home equity loan could provide funds for your child’s college tuition. The interest rate may be lower than parent student loans, but you’re risking your home as collateral.
U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.
To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. The scoring factors for private student loan providers are customer service ratings, fixed APR, variable APR, loan product availability, minimum and maximum loan terms, minimum and maximum loan amounts, minimum FICO score, and online features.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.
To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.
A parent student loan is a type of federal or private student loan designed specifically for parents helping a child pay for school.
The main difference between Parent PLUS loans and private parent loans is who issues the loan. Parent PLUS loans come from the federal government, while private parent loans are issued by banks, credit unions and other nongovernment lenders.
Private parent loans for college typically offer greater flexibility, with more term and rate options. You may also be able to borrow more with a private loan and have the option to cosign with a student.
On the other hand, it can be easier to qualify for a Parent PLUS loan, and these loans may be eligible for government loan forgiveness programs.
As the borrower on a parent student loan, you are the only person responsible for repaying it. Even if children agree to take over payments after graduation, they’re not legally obligated to make good on that promise. However, you might want to consider a private loan that offers a cosigner release option.
