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Best Student Loans for Parents
Has your child asked for help paying for college? Most students end up responsible for out-of-pocket costs ranging from $6,000 to $10,000 per year, according to Saving for College. The good news is, parent student loans can help you split up the costs into monthly payments.
Written by:Jessica Walrack
So where should you look for these loans? While the federal government offers a student loan for parents, it’s not your only choice — and isn’t necessarily the best. Private lenders offer very competitive parent student loans with no fees and lower APRs. Plus, you can easily apply for them online within a few minutes. Not sure where to start? Our team of financial experts reviewed and ranked more than 30 online lenders to help you find the best student loans for parents. Here are our top 7 picks!
Top Picks for Best Student Loans for Parents
- Earnest- Best Overall Parent Student Loan
- College Ave - Best for Low APRs and Fast Funding
- Education Loan Finance (ELFI) - Best for Flexible Repayments
- Credible- Best for Comparison Shopping
- SoFi- Best for Borrowers with Excellent Credit
Best Student Loans For Parents in 2024 - Full Overview
After vetting dozens of lenders, here are the 7 best student loan options for parents.
Earnest- Best Overall Parent Student Loan
Earnest’s parent student loan tops our list thanks to its lenient eligibility requirements, competitive APRs, flexible payment options, lack of fees, and more. The main downside? It won’t be an option if you live in Nevada.
Pros
Cons
Features
Earnest offers student loan amounts to parents that range from $1,000 up to the certified cost of the student’s attendance for one year. Both fixed and variable interest rates are available with fixed rates starting at a 3.24% APR and variable rates starting at a 1.34% APR. The lowest APRs include a 0.25% autopay discount.
These loans don’t come with an origination fee and the terms range from five to 20 years. Further, it typically takes two to five weeks to complete the loan disbursement process. To qualify, you’ll need a credit score of at least 650 and a minimum annual income of at least $35,000.
When it comes to loan repayments, Earnest offers two options. You can begin your full repayments right away or can make interest-only payments until nine months after the student graduates. Additionally, the lender allows you to defer a payment to the end of your loan once per year (conditions apply). Note, these loans are not available in Nevada.
Bottom Line
If you’re shopping for a parent student loan, it’s worth applying with Earnest to see what you can get. This lender offers an all-around great loan product that ticks most of the boxes.
Try EarnestRead the full Earnest Review for more details.
College Ave - Best for Low APRs and Fast Funding
If you’re shopping for a parent student loan, it’s worth applying with Earnest to see what you can get. This lender offers an all-around great loan product that ticks most of the boxes.
Pros
Cons
Features
College Ave offers parent student loans that range from $1,000 up to your child’s total school-certified cost of attendance for one year. Both fixed and variable interest rates are available with variable rates ranging from a 0.94% APR up to a 13.24% APR, and fixed rates ranging from a 3.39% APR up to a 14.23% APR. The lowest rates include a 0.25% autopay discount.
You can choose a repayment term from five to 15 years and won’t have to worry about an origination fee. Further, loans are typically disbursed within 10 days of applying, but the time period can vary depending on your child’s school. To qualify, you’ll need good credit but the exact credit score required isn’t given. You can, however, see if you qualify within a few minutes on the website.
College Ave’s parent loans are available to parents, but also guardians, grandparents, and other family members like aunts and uncles. The majority of the funds go directly to the student’s school, although, you can have up to $2,500 disbursed right to you for expenses such as books, school supplies, and transportation. When it comes time for repayments, you can make full interest and principal payments or can make reduced payments while your child’s in school.
Bottom Line
If you’re looking for the best student loan rates for parents, be sure to apply with College Ave. Plus, it’s open to family members beyond just parents.
Try College Ave
Read the full College Ave review for more details.
Education Loan Finance (ELFI) - Best for Flexible Repayments
Education Loan Finance (ELFI) offers a parent student loan with a competitive starting APR but really shines when it comes to its repayment options. You can opt for interest-only or deferred payments until the student drops below half-time enrollment in school. This can be a helpful option if you need a little time before you start making loan payments.
pros
Cons
Features
ELFI offers student loans for parents that range from $1,000 up to the school-certified amount of one year’s qualified education expenses. Fixed and variable interest rates are available with fixed rates starting at a 3.20% APR and variable rates ranging from a 1.30% APR up to an 18% APR. There are no fees for the loans and terms range from five to 10 years. To qualify, you must have a credit score of at least 680.
ELFI’s loans aren’t restricted to just parents. They are available to parents, stepparents, foster parents, adoptive parents, grandparents, siblings, aunts, and uncles. As for repayments, you can pay the full amount right away, or can opt to defer or reduce the payments until the student drops below half-time enrollment.
Bottom Line
ELFI is a good student loan for parents and other family members due to its flexible repayment options, lenient credit requirements, and competitive starting APRs. However, the max APR is on the high side so may not be the best for those without great credit.
Try Education Loan Finance
Read more in the full Education Loan Finance review.
Credible- Best for Comparison Shopping
While the other companies on this list are direct lenders, Credible is a marketplace that helps you compare parent student loans. You can visit the site and see four lenders side-by-side. This can be a helpful way to shorten the research process when trying to find the best private parent student loans for your situation.
Pros
Cons
Features
Credible is a website that can help you find the best parent student loan for your situation. It enables you to compare multiple lenders side-by-side. The loans you find on Credible won’t have any origination fees. Further, they come with multiple repayment options and typically fund up to the full cost of your child’s attendance for one school year. While rates and terms vary by lender, fixed rates currently range from a 2.20% APR up to a 13.98% APR. Variable rates range from a 0.94% APR up to a 12.99% APR. Additionally, the terms range from five to 20 years.
Bottom Line
When you’re looking for the best private student loans for parents, a marketplace like Credible can be a helpful way to compare multiple options in one place. Check out rates from four lenders including College Ave!
Try CredibleRead the full Credible review for more details.
SoFi- Best for Borrowers with Excellent Credit
SoFi is a direct lender that offers private student loans for parents who have good-to-excellent credit. If that’s you, you can apply online in minutes and get approved for a competitive APR. Plus, SoFi offers two different APR discounts which can help you save even more.
pros
Cons
Features
SoFi offers parent student loans ranging from $1,000 up to the total certified cost of a student’s attendance for one year. It offers loan terms from five to 15 years. Fixed and variable interest rates are available with fixed rates ranging from a 4.48% APR up to a 13.80% APR and variable rates ranging from a 1.69% APR to a 12.23% APR. APRs can be lowered through SoFi’s autopay discount of 0.25% APR and a 0.125% discount if you have loans for multiple students. Additionally, you won’t have to worry about origination fees with this lender but funding typically takes four to six weeks.
When it comes to repayments, you can opt for full repayments from the start or interest-only payments until six months after the student drops below half-time enrollment. SoFi also offers a program where you can earn points by taking actions like checking your credit report and setting up direct deposit. You can then use your points to help pay off your loan. To qualify with this lender, you need good-to-excellent credit but don’t have to be a parent. Borrowers can be anyone with good credit willing to sponsor a student including family friends, aunts, uncles, and grandparents.
Bottom Line
SoFi’s parent student loans offer good term lengths, competitive APRs, flexible repayments, and other perks. If you have a good credit score, strong credit history, and mid-to-high income, apply to see what deal you can get.
Try SofiRead the full SoFi Review for more details.
Risla - Best for Borrowers with Good Credit
Risla is a direct lender that does things a bit different. Instead of an APR range, it offers parents a single fixed APR. This can work to your advantage if your credit is good but not great. Where other lenders may offer you a rate at the higher end of their APR range, you’ll get Risla’s fixed rate that lands in the 6% to 7% range. For that reason, this is one of the best student loans for parents with good credit.
Pros
Cons
Features
Risla offers parent student loans from $1,500 up to $45,000 per year. However, the loan amount can not exceed the total cost of attendance for one year, less other financial aid received. These loans have no origination fees. The interest rate available is a fixed APR of 6.59%, which can be reduced by 0.25% with autopay. The repayment term is six years and payments begin 15 days after loan disbursement. Approval is based on factors like your credit and income. While no minimum credit score requirement is disclosed, borrowers must make at least $40,000 per year.
Risla offers unique rewards for borrowers including $2,000 of loan forgiveness for students who take on internships, and four years of no interest on loans for nurses. The lender also offers income-based repayment options, payment forbearance, and an unfortunate incident forgiveness benefit.
Bottom Line
Risla can help borrowers with fair-to-good credit to get a lower APR. However, it can cause those with great-to-excellent credit to get a higher APR than they would get elsewhere.
Try RislaRead the full Risla review for more details.
Discover - Best for Payment Assistance Programs
Discover offers a variety of payment assistance programs that can help if you ever have trouble making your payments. This kind of flexibility is important if your income source is at risk for any reason. While the APRs start on the higher side, they max out about where other lenders land — so borrowers with good (but not excellent) credit, can still end up with a competitive APR.
Pros
Cons
Features
Discover offers loan amounts from $1,000 up to the full school-certified cost of attendance for one year. Fixed and variable interest rates are available, with variable rates ranging from a 7.99% APR up to a 13.74% APR and fixed rates ranging from a 8.99% APR up to a 14.74% APR. The lowest rates include an auto-debit interest rate reduction of 0.25%.
These loans have no origination fees and come with a 15-year repayment period. Repayments will become due shortly after the loan is disbursed. While flexible repayment options aren’t available, Discover does offer multiple payment assistance programs if you run into trouble with your payments.
Bottom Line
Check your rates with Discover to see if the offer you get is competitive. When comparing offers, be sure to factor in Discover’s borrower protections, especially if you have income-stability concerns.
Try DiscoverRead the full Discover review for more details.
How to Choose the Best Student Loans For Parents
Before we get to the top picks, you may be wondering how the best student loans for parents are chosen. Here’s a quick look at the main factors we consider.
- Loan features: The loan amounts, terms, and use limitations on private parent student loans can vary from one lender to the next. Look for a lender with offerings that suit your needs.
- Interest rates and fees: The amount a lender charges will determine how much the parent student loan costs you over time. Look for lenders with the lowest interest rates and no fees.
- Application process: Check what information the application requires, if you can get pre-qualified without a hard inquiry, how long it takes to get approved, and funding turnaround times.
- Qualification process: Look for a lender’s eligibility requirements, such as the minimum credit score and income amount that’s required to qualify. Some lenders are more lenient than others.
- Customer support: Find out how you can get help if you run into a problem and what options are in place if something goes wrong. For example, does the lender offer live chat, email support, and phone support? Also, do they have options for payment deferments or forbearance?
- Online user reviews: Find out how a lender’s past borrowers rate their experience. You can read online user reviews on Trustpilot.
- Perks and bonuses: Look for any other service offerings that set a lender apart, such as the ability to borrow if you’re not a parent.
Best Student Loans For Parents - Feature Comparison
| Company Name | Est. APR | Min. credit score | Loan Amount | Loan term |
|---|---|---|---|---|
| Earnest | Variable rates start at 1.34% APR, fixed rates start at 3.24% APR | 650 | $1,000 up to student's ceritfied cost of attendance | 5-20 years |
| College Ave | Variable 0.94%-13.24% APR, Fixed 3.39%-14.23% APR | Not disclosed | $1,000 up to student's ceritfied cost of attendance | 5-15 years |
| ELFI | Variable 1.30%-18% APR, Fixed starts at 3.20% APR | 680 | $1,000 up to student's ceritfied cost of attendance | 5-10 years |
| Credible | Variable 0.94% - 12.99%, Fixed 2.20% -13.98% APR | Not disclosed | $1,000 up to student's ceritfied cost of attendance | 5-20 years |
| SoFi | Variable 1.69%-12.23% APR, Fixed 4.48%-13.80% APR | Not disclosed, good to excellent | $1,000 up to student's ceritfied cost of attendance | 5-15 years |
| Risla | Fixed 6.59% APR | 680 | $1,500 to $45,000, but not more than a student's cost of attendance | 6 years |
| Discover | Variable 7.99% up to 13.74% APR, Fixed 8.99% up to 14.74% APR | Not disclosed | $1,000 up to student's ceritfied cost of attendance | 15 years |
What is a Parent Student Loan?
A parent student loan is a loan issued to the parent of a college student to pay for their child’s higher education expenses. Parents can apply for federal or private parent student loans, and approval will be based on factors like their credit and income.
Upon approval, the loan amount is disbursed directly to the student’s school. However, in some cases, the amount (or a portion of it) may be disbursed directly to the parent. The parent is then responsible for repaying the loan amount over a set term, plus any applicable fees and interest. Although the loan is used to pay for the child’s college education, the parent is fully responsible for the repayments.
How to Decide if a Parent Student Loan is Right for You
When deciding if a parent student loan is right for you, it’s important to understand your options. First, what help can your child get on their own? They should fill out the Free Application for Federal Student Aid (FAFSA) to see what financial aid is available to them (often loans and grants are offered). Federal student loans for students offer a few notable benefits such as low interest rates, no credit checks, no repayments until after college, flexible repayment plans, and forgiveness options.
However, if a student’s financial aid isn’t enough to cover their expenses and requires a large expected family contribution, a parent student loan can come in handy. When determining if a particular parent student loan is right for you, be sure to shop around and compare a few offers. You want to ensure you get a competitive loan that best suits your needs.
What Are the Different Types of Student Loans for Parents?
When it comes to student loans for parents, there are two main types — Parent PLUS Loans provided by the federal government and private loans provided by private lenders.
Parent PLUS Loan
Parent PLUS Loans are available from the federal government to eligible parents of dependent undergraduate students who are enrolled at least half-time in an eligible school. To qualify, you’ll need to meet the credit and general eligibility requirements for federal student aid.
Loan amounts can go as high as your child’s cost of attendance, less any financial assistance they receive. Interest rates are fixed and are set each year for all borrowers. Currently, they sit at 7.54%. You’ll also have to pay a loan fee, which is currently 4.228% of the loan amount for loans disbursed between October 2021 and October 2023.
Private Parent Loan
Private parent student loans are loans from private, non-government lenders. They are meant to help parents pay for their children’s higher education expenses. Eligibility requirements, loan amounts, interest rates, fees, and repayment options will all vary from one lender to the next. However, interest rates generally average 6% to 7%, but can go as low as 1% APR. Further, they typically don’t charge origination fees.
Overall, Parent Plus Loans offer flexible repayment term options, fixed interest rates, and deferment/forbearance options which can be helpful. However, well-qualified borrowers may find similar benefits and lower costs from private lenders.
Comparing the Different Types of Parent Student Loans
| Parent PLUS Loan | Private Parent Loan | |
|---|---|---|
| Loan Amount | Cost of attendance, minus financial aid received | Cost of attendance, within lender’s loan limits |
| Interest Rate | 7.54% | 1.04% to 12.99% |
| Rate Types | Fixed | Fixed and variable |
| Terms | 10 to 30 years | Varies, usually 5 to 15 years |
| Origination Fee | Yes, 4.228% of loan amount | Not usually but varies by lender |
| Repayment | Standard, graduated, extended, income-contingent | Options will vary |
| Co-Signer | Allowed | Usually allowed |
How to Apply for a Private Parent Loan
Ready to apply for a private parent student loan? Here are the steps you’ll need to follow:
- Get a rough estimate of your student’s education costs: Most lenders base your loan amount on your child’s cost of attendance for one year, and they typically confirm the amount with your child’s school. Save yourself time and confusion by getting an estimate from the school as soon as possible.
- Research private parent student loan lenders: If you only apply with one lender, your chances of getting the best deal are slim. Shop around to see what different loans are available. The list above is a helpful starting point. Review interest rates, eligibility requirements, fees, terms, repayment options, customer reviews, etc. Make a shortlist of your favorite private lenders.
- Apply: To apply, you’ll visit the website of the private lender and fill out an online application. The process may require a hard or soft credit inquiry — soft inquiries are preferred as they don’t impact your credit score. You’ll also need to share information about your income, address, citizenship, and more.
- Review your offers: Once you’ve applied, review the offers you receive side-by-side. Compare them to find the one that offers the best overall value for you. Be sure to look at the monthly cost, the overall cost, repayment flexibility, and customer service reviews.
- Select the best private parent loan: Once you’ve found the one, you’ll accept the loan offer from that lender. From there, you may have to undergo additional steps to verify income, run a hard credit check, sign paperwork, etc.
Applying for a private parent student loan is typically similar to getting an auto or personal loan online. It’s based on your creditworthiness. However, there will often be the step of the lender checking your child’s school to verify the cost of attendance. Parent PLUS Loans, on the other hand, won’t involve any comparison shopping because there is only one provider. You just head over to the Federal Student Aid website and complete the application.
How To Repay Parent Student Loans
How you repay a parent student loan will depend on your lender and the terms. Standard repayments involve monthly payments over a set term starting shortly after you receive the loan. You continue making the payments each month until the outstanding balance is paid in full.
However, your lender may offer alternatives such as interest-only payment plans, for example. These enable you to pay a reduced amount (just the interest) until the student drops below half-time enrollment. You may also be able to extend your term if you find you need to lower your monthly payment.
Parent PLUS loans that have been consolidated into Direct Consolidation Loans will qualify for income-contingent repayment plans. These base your monthly payment amount on your income and family size to help make it more affordable. A big perk here is, if you don’t pay off your balance after a certain term (20-25 years), your remaining balance will be forgiven.
Conclusion
Parent student loans offer a way for you to split up your child’s higher education costs over time. Whether you opt for a federal loan, private loan, or a mix of both, it’s important to understand all of the costs, terms, and conditions. Private loans can offer the best value when your credit is good, while federal loans can be a better bet if not.
Ready to research the best private student loan lenders for parents? The list of top picks above is a good place to start.
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Read MoreAbout the Author
Jessica Walrack
Started freelance writing about 9 years ago after leaving a career in retail sales and management. Fell in love with writing content and copy and have been doing it ever since
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