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Parent PLUS Loan vs. Private Loan

The table below shows a comparison of the Federal Parent (PLUS) Loan vs. a Private Student Loan.

Federal Parent PLUS Loan Private Loan
Responsible Party Parent Student
Co-Signer Co-signer is not required. Optional if denied due to adverse credit. Varies depending on lender.
Interest Rate Fixed
See Federal Student Aid: PLUS Loans
Variable, ranges from 3–13%.
Interest Tax Deductible Yes, parents may be able to use interest paid on loan for tax deduction, subject to IRS guidelines. Yes, student may be able to use interest paid on loan for tax deduction, subject to IRS guidelines.
Fees Yes, a loan fee
See Federal Student Aid: PLUS Loans.
Fees vary depending on lender.
May have lower fees but higher interest rates.
Minimum Requirement $200 per year, $100 per semester. Varies depending on lender. Range: $500–$1,500 minimum.
Loan Limits Can borrow up to student's cost of attendance. Can borrow up to student's cost of attendance. May have limit depending on lender and credit history.
Credit Check Credit check required.
No debt-to-income ratio requirement
Credit check required.
Minimum income and debt-to-income ratio requirement.
Repayment

Begins 60 days of loan being fully disbursed. See Federal Student Aid: PLUS Loans—When do I begin repaying my loan?

Repayment period: up to 25 years. See Federal Student Aid: Repayment Plans.

Student and parent can work out payment arrangements. Example: The loan is in the parent's name, but the student can make payments.

Varies depending on lender.

Repayment period: 4–25 years.

Student and parent can work out payment arrangements. Example: The loan is in the student's name, but the parent can make payments.
Deferment Can request to defer until student is no longer attending at least half time. Varies depending on lender.
Application Process Online at studentloans.gov.

Online with lender.

If the student is dependent, one parent must sign the student's private loan paperwork stating they are aware they had the Parent PLUS option but are choosing the private loan option.
Consolidation Can be included with parent's other federal loans (not student's). Can NOT be included with federal student loans.
Denial If parent applies and is denied, the student is eligible for additional unsubsidized loans. If denied, would have to try another private lender.
Tracking Your Balance Parent can check PLUS loan balances on the same site as other Federal Loans: www.nslds.ed.gov Must log on to each lender's site and track yourself. No central site to check all private loans.
Release No, parent made commitment to repay loan. Vary depending on lender, may apply to release cosigner.
Forgivable Yes, if primary borrower or student beneficiary dies or if primary borrower becomes disabled, payments may be waived (conditions apply). Varies by lender. Some waive remaining balance in event of primary borrower's death or permanent and total disability.

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