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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.

Best Student Loans for Parents
Jessica Walrack
Written by:Jessica Walrack
Personal Finance Writer

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!

Our Top Picks for Best Student Loans for Parents

earnest_logo_sl
  • Long 9-month deferment period
  • Opportunity to skip one payment per year
  • No origination fees or prepayment penalties
Min. Credit Score
Min. Credit Score 650+
Loan Amounts
Loan Amount $1K up to the cost of attendance
Fixed APR
Fixed APR 5-20 years
college_ave_logo_sl
  • Auto-pay discount available
  • Flexible repayment terms (up to 15 years)
  • Prequalify without a credit check
Min. Credit Score
Min. Credit Score Not disclosed
Loan Amounts
Loan Amount $1K up to the cost of attendance
Fixed APR
Loan Repayment 5-15 years
education_loan_sl
  • Flexible repayment options
  • Interest rate cap of 9.95% on refinance loans
  • Compare rates with no credit score impact
Min. Credit Score
Min. Credit Score 680+
Loan Amounts
Loan Amount $1K up to the cost of attendance
Fixed APR
Loan Repayment 5-15 years

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 in 2022 - Full Overview

After vetting dozens of lenders, here are the 7 best student loan options for parents.

1. Earnest- Best Overall Parent Student Loan

Earnest
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
Good terms: Terms range from 5 to 20 years
Flexibility: Interest-only payments and deferrals.
Fair credit ok: Credit scores as low as 650 accepted.
No fees: No origination, prepayment, or late fees.
Cons
Long funding time: Two to five weeks.
Not available in NV: Nevada residents won’t qualify.
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 Earnest

2. College Ave - Best for Low APRs and Fast Funding

College Ave
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
Low APRs: Variable APRs as low as 0.94%.
Direct disbursement: $2,500 direct disbursement available.
Flexible payments: Interest-only payments allowed.
Not just parents: Other family members eligible.
Fast disbursement: 10-day loan disbursement.
No fees: No origination fees.
Cons
No payment deferrals: Can’t defer payments.
Unclear protections: Forbearance and forgiveness unclear.
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

3. 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
Flexible repayments: Interest-only payments and deferrals.
Lenient credit requirements: Credit scores as low as 680 okay.
No fees: No application, origination, or prepayment fees.
Cons
Limited terms: Terms limited to 10 years.
Relatives only: Borrowers must be relatives.
High max APR: Max variable APR is 18%.
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.

4. Credible- Best for Comparison Shopping

Credible
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
Save time: Cut down on your research time.
Long loan terms: Loan terms up to 20 years.
No fees: No origination fees.
Cons
Not a direct lender: No direct loans.
Limited lender partners: Only four partners.
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 Credible

5. SoFi- Best for Borrowers with Excellent Credit

SoFi
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
Don’t have to be a parent: Any qualified person can borrow.
Points program: Earn points to pay loans.
Low APRs: Low APRs and discounts.
Interest-only payments: Pay only interest for a period.
Cons
Strict credit requirements: Need good-to-excellent credit.
Long funding time: Takes four to six weeks.
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 Sofi

6. 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
One fixed APR: Fixed APR of 6.59%.
Rewards: Savings for certain students.
Borrower protections: Payment assistance options.
Cons
Short loan term: Loan term is six years.
Limited repayments: No reduced payment options.
Max loan limit: Loans are limited to $45,000.
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 Risla
Read the full Risla review for more details.

7.Discover - Best for Payment Assistance Programs

Discover
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
Payment assistance: Many programs to avoid a default.
Not just parents: Non-family members can qualify,.
No fees: No application, late, or origination fees.
Cons
High starting APRs: APRs start at 7.99%..
Limited terms: Only 15-year term
Limited repayment options: No reduced payment options.
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 Discover

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.

Frequently Asked Questions (FAQ)

What expenses can a parent student loan be used for?

Student loans should be used to pay for your child’s student-related expenses. These often include tuition, fees, room and board, textbooks, computers, study abroad costs, transportation to school and home, and even their groceries. You’ll want to avoid using the funds on personal expenses like vacation travel, clothes, luxury meals out, or a down payment on a home.

Who should choose a private parent loan?

A private parent student loan can be a helpful option for well-qualified borrowers whose kids still need financial assistance after receiving aid from the federal government. Private student loans can come with interest rates as low as 1% to 2%, which is hard to beat. If you can get a lower rate than what comes with Parent PLUS Loans, and fewer fees, private loans can make sense.

Does cosigning a student loan hurt your credit?

When you cosign on a student loan, the lender will run a hard inquiry on your credit. The loan will also show up on your credit report. Hard inquiries and new large loans both cause your credit score to drop. However, it will recover and can improve as time passes (as long as all the payments are made on time). If payments are missed, it will continue to hurt your credit score.

How is the interest rate on a parent student loan determined?

Interest rates on Parent PLUS loans are fixed and they’re the same for everyone. The federal government sets the rate each year. On the other hand, interest rates on private parent student loans are based on the lender’s underwriting process. You’ll often be evaluated based on factors like your credit scores, credit history, income, and debt-to-income ratio.

Can I refinance a parent student loan?

Yes, student loans can be refinanced. The federal government offers a consolidation program for Parent PLUS loans, amongst other federal loans. Further, many private lenders offer student loan refinancing offerings. However, be sure to review what benefits you may lose before paying off your current loan with a new one.

What if I can’t repay my Parent PLUS loan?

If you can’t repay your Parent PLUS loan, look into the alternative payment options available to you. The income-contingent payment plan restructures your payments based on your income to make them more affordable. Further, a graduated repayment plan could reduce your payments now and increase them down the road. You could also request a deferment or forbearance to buy yourself some time. Another option is to look into refinancing the loan to get a better rate or having your child refinance in their name (if they qualify now).

What happens to my Parent PLUS Loan once I retire?

Retirement does not have any impact on Parent PLUS loans. You will be required to continue making payments according to your loan agreement until the balance is paid in full, or otherwise settled.

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About the Author

Jessica Walrack

Jessica Walrack

Personal Finance Writer

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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