We are an independent, advertising-supported comparison service. Our mission is to empower you to make more informed financial decisions by giving you access to interactive tools and financial calculators, publishing original and unbiased content, allowing you to conduct free research and information comparisons, and publishing original and objective content. Partnerships between Bankrate and issuers like American Express, Bank of America, Capital One, Chase, Citi, and Discover are just a few examples.
How We Make Money
The offers that show up on this website are from businesses that pay us. This compensation may have an effect on the placement of products on this website and other factors, such as the order in which they may appear within listing categories. However, the information we publish or the user reviews you see on this website are unaffected by this compensation. We exclude the full range of businesses and financial opportunities that may be available to you.
At Bankrate, we work to guide you toward making more informed financial decisions. Although we follow strict guidelines, this post may mention products from our partners. Heres an explanation for . Bankrate logo.
Bankrate, which was established in 1976, has a long history of assisting people in making wise financial decisions. By demystifying the financial decision-making process and empowering people to know what to do next, we’ve maintained this reputation for more than 40 years.
You can trust that Bankrate adheres to a strict editorial policy and is acting in your best interests. Our content is written by highly qualified professionals, and it is edited by specialists in the fields in which it is published, ensuring that it is impartial, truthful, and reliable.
For you to feel comfortable investing your money, our loan reporters and editors concentrate on the topics that matter to consumers the most, such as the various lending options, the best rates, the best lenders, how to pay off debt, and more. Bankrate logo.
You can trust that Bankrate adheres to a strict editorial policy and is acting in your best interests. Our esteemed editors and reporters produce truthful and accurate content to assist you in making wise financial decisions.
We value your trust. Our editorial standards are in place to ensure that we fulfill our mission of giving readers accurate and unbiased information. To make sure the information you’re reading is accurate, our editors and reporters conduct extensive fact-checking on editorial content. Our editorial team and advertisers are separated by a wall that we uphold. Our editorial staff does not get paid directly by our advertisers.
The editorial staff at Bankrate writes on behalf of YOU, the reader. Our aim is to provide you with the best guidance so that you can make wise decisions regarding your personal finances. To prevent advertisers from influencing our editorial content, we adhere to strict guidelines. Our editorial staff is not paid directly by advertisers, and all of our content is meticulously fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can be sure that the information is reliable and trustworthy. Bankrate logo.
How we make money
You have money questions. Bankrate has answers. For more than 40 years, our experts have been assisting you in becoming financially savvy. We continuously work to give customers the knowledge and resources necessary to be successful in their financial endeavors.
You can rely on Bankrate’s editorial standards to produce truthful and accurate content. Our esteemed editors and reporters produce truthful and accurate content to assist you in making wise financial decisions. Our editorial team produces factual, unbiased content that isn’t influenced by our advertisers.
We are open and honest about how we earn money in order to provide you with high-quality content, affordable prices, and practical tools.
Bankrate. com is an independent, advertising-supported publisher and comparison service. We receive payment in exchange for the placement of sponsored goods and services on our website or when you click on specific links there. As a result, this compensation may affect the placement, timing, and order of products within listing categories. A product’s availability in your area or within your self-selected credit score range, among other things, may have an impact on how and where it appears on this site. Bankrate does not provide information on every financial or credit product or service, despite our efforts to do so.
It’s typically best to look into financial aid options like scholarships and grants first if you want to help pay for your child’s college education. When it comes to parent loans for college, you have two options: federal Direct PLUS Loans and private student loans, should there be any remaining costs.
Private student loans can have variable interest rates and fewer fees in contrast to federal Direct PLUS Loans, also known as parent PLUS loans, which have fixed interest rates and federal protections. The best decision for you will depend on your priorities and the financial situation of your family.
Parent PLUS vs. private student loan rates
|Parent PLUS loans||Private parent student loans|
|Type of interest rate||Fixed||Fixed or variable|
|Current rates||6.28% for 2021-22, 7.54% for 2022-23||1% to 14%|
|Origination fee||4.228%||Varies by lender|
|Credit check required||Yes||Yes|
|Repayment terms||10 to 25 years||5 to 25 years|
|Borrowing limits||Up to the cost of attendance, minus financial aid||Often up to the cost of attendance, minus financial aid|
What is a parent PLUS loan?
Parent PLUS loans are government loans parents can take out to pay for all or some of their child’s college education. About 3.6 million parents have this type of loan at last count, according to the most recent data from the Trellis Company.
You may take out a loan for your child’s education costs, less any other financial aid they may receive. However, it’s crucial to remember that loan costs are slightly higher than those of federal loans intended for students. Parents not only pay a 4 upfront loan fee They are also charged an interest rate of 6 percent, which is added to the loan disbursement at a rate of 228%. 28 percent for the 2021-22 school year and 7. 54 percent for the 2022-23.
How do federal parent PLUS loans work?
Federal parent PLUS loans accrue interest as soon as the money is disbursed, though you can delay payments while your child is in school. Parent PLUS loans, as opposed to private options, are qualified for some federal repayment and forgiveness programs.
To apply for a parent PLUS loan, follow these steps:
Each academic year, parents must reapply for the parent PLUS loan.
Will parent PLUS loans be included in student loan forgiveness?
President Biden has talked about forgiving borrowers who meet certain requirements for up to $10,000 in student loans. Even though there is still no assurance that student loans will ever be forgiven in any way, parent PLUS loans are probably going to be covered since they are owned by the government.
Parents with these loans can apply for current student debt forgiveness programs in the interim. Public Service Loan Forgiveness, which eventually forgives student loan debt for borrowers who work for a government or nonprofit employer, is among the most well-known of these programs. Parents must enroll in the income-contingent repayment plan and consolidate their parent PLUS loan through a Direct Consolidation Loan in order to benefit from the program.
How do private parent student loans work?
Private financial institutions like banks, credit unions, and online lenders are the source of private student loans. Parents may co-sign a loan with their child or take out the loan as the primary borrower. Here’s how to get a private college loan for parents:
Like federal loans for parents’ college, you’ll probably need to reapply every year.
How to choose a parent student loan
It is up to each borrower to choose between federal PLUS loans and private parent loans. When choosing between parent loans for college, consider these issues:
A private loan or a parent PLUS loan may be able to meet your needs if you’re a parent who wants to contribute money to your child’s college expenses. Your best bet is to weigh the long-term costs of both options when comparing them.
Our recommendation is to compare private lender student loan rates and fees to the set, anticipated costs of parent PLUS loans. Private student loans could result in significant savings if you can get a comparable monthly payment and repayment schedule while paying less money overall.
What is the current interest rate for the Parent PLUS loan?
The interest rate for Direct PLUS Loans is 0% during the payment break. Your Direct PLUS Loan will have a fixed interest rate of 7 percent if you obtained it on or after July 1, 2022, but before July 1, 2023. 54% after the payment pause ends.
Do Parent PLUS loans have lower interest rates?
Parent PLUS loans have the highest interest rates of all federal student loan programs, and they might even be higher than the rates you could get from a private lender. Parent PLUS loans must pay an origination fee of 4 percent. 228% of the loan amount. Private lenders often don’t charge fees.
What will interest rates be on student loans in 2022?
For the 2022–2023 academic year, the following federal student loan interest rates will be higher: Direct Subsidized Loans (Undergraduates): 4 99% Direct Unsubsidized Loans (undergraduates): 4. 99% Direct Unsubsidized Loans (graduate and professional students): 6. 54%.
What is the monthly payment for a parent PLUS loan?
Parent PLUS Loans have an income-dependent repayment option. The monthly payment is 20% of your discretionary income, which is the amount by which your income exceeds the federal poverty line.