Parent student loans can be useful for those who want to help their children pay for college but are unable to do so out of pocket. This type of loan requires the parent (or sometimes grandparent, legal guardian or other relative) to submit an application on the student's behalf and assume financial responsibility for repaying the loan. Of course, you'll want to make sure you're in a good place financially to take on debt, since many parent student loan lenders require at least interest payments to be made while the student is still in school.
Parents can choose between federal and private student loans. Federal loans are generally easier to be approved for and provide access to forgiveness programs, but may have higher interest rates and origination fees than private loans.
Below, CNBC Select reviews the best parent student loan lenders based on eligibility requirements, availability, loan amounts, interest rates, terms and more. (See our methodology for more information on how we choose the best parent student loans.)
Best parent student loans
Best overall
Federal Parent PLUS Loan
Cost
4.228% of the loan amount for loans disbursed on or after Oct. 1, 2020
Eligible loans
Direct PLUS loans, PLUS loans for graduate and professional students, parent PLUS loans
Loan types
Fixed
Fixed rates (APR)
8.05% for loans disbursed on or after Jul. 1, 2023, and before Jul. 1, 2024
Loan terms
10–30 years, depending on the repayment plan
Loan amounts
Maximum amount is for the total cost of attendance
Minimum credit score
Not disclosed but there are still options for those who apply for a parent PLUS loan with adverse credit
Minimum income
N/A
Allow for a co-signer
An endorser may be obtained if applying with adverse credit
See our methodology, terms apply.
Pros
- Can borrow up to the cost of attendance
- Can request deferment or forbearance
- Ability to still receive a loan award even with adverse credit history
- Can choose from multiple repayment plan options
Cons
- Parents cannot transfer payment responsibility onto the child
- 4.228% fee
Federal grants and aid that don't need to be repaid should always be your first line of attack for funding your child's college education. But if you need more money, federal loan options may be worth considering. Federal loans have fixed interest rates, which may be more attractive for parents with lower credit scores, and make it easier to request forbearance or deferment compared to private loans.
Unlike many private loans that have borrowing limits, Federal Parent PLUS Loans allow you to borrow as much as needed to cover your child's educational expenses.
Best for saving money
SoFi Parent Loan
Cost
No origination fees, no application fees, no insufficient funds fees, no prepayment penalties or late fees
Eligible loans
SoFi parent loan
Loan types
Fixed and variable rates
Variable rates (APR)
6.34% - 14.83% APR (with autopay)
Fixed rates (APR)
6.5% - 14.83% APR (with autopay)
Loan terms
5, 7, 10 and 15-year terms available
Loan amounts
Minimum is $1,000; Maximum amount is for the total cost of attendance
Minimum credit score
Not disclosed
Minimum income
Not disclosed
Allow for a co-signer
Not disclosed, however, students applying for a private student loan can have their parents co-sign on the loan
Terms apply.
Pros
- Can borrow up to the cost of attendance
- Four loan repayment terms available
- Doesn't charge origination fees, application fees, insufficient funds fees, prepayment penalties or late fees
- Your student doesn't need to be enrolled in their degree program full-time but must be attending at least half-time
- Deferment options available
- Can apply and get a credit decision in about 3 minutes
- 0.25% interest rate reduction when you sign up for autopay
- Additional 0.125% interest reduction if you're an existing SoFi member
- Receive an automatic 0.125% discount if you've taken out a SoFi private student loan before
- Earn points for completing tasks within the SoFi app; points can be used to pay down your parent student loan balance
- Unemployment protection program available
Cons
- Your child's school must be on SoFi's eligible schools list
SoFi parent loans have no fees and offer three opportunities to save money on interest charges: receive a 0.25% interest rate reduction when signing up for autopay; receive an additional 0.125% interest reduction for being an existing SoFi member; and receive an automatic 0.125% discount if you've taken out a SoFi private student loan before.
This lender also has an unemployment protection program designed for borrowers who lose their jobs through no fault of their own. This program allows borrowers to put their loans into forbearance and modify their monthly payments.
Best for no fees
Citizens Bank Parent Loan
Cost
No origination fees, application fees, disbursement fees or prepayment penalty
Eligible loans
Citizens Bank parent student loan
Loan types
Fixed and variable rates
Variable rates (APR)
7.22% - 9.57% APR
Fixed rates (APR)
7.33% - 9.56% APR
Loan terms
5 and 10-year terms
Loan amounts
Minimum is $1,000; Maximum amount depends on the type of degree (graduate or undergrad, MBA, Law and Healthcare)
Minimum credit score
Not disclosed
Minimum income
Not disclosed
Allow for a co-signer
Not disclosed, however, students applying for a private student loan can have their parents co-sign on the loan
Terms apply.
Pros
- No origination, application, disbursement fees or prepayment penalty
- Can receive rate information in just two minutes
- Multi-year approval
Cons
- The maximum loan amount depends on the type of degree
- Limited repayment terms
Citizens Bank offers a no-frills parent student loan option that doesn't charge any origination fees, application fees, disbursement fees or prepayment penalties. Eligible borrowers can submit their information and receive a rate in as little as two minutes online, making it an accessible and expedient process to help you weigh your options.
Best for flexible repayment terms
College Ave Parent Student Loan
Cost
No origination fees or prepayment penalties
Eligible loans
College Ave Parent Student Loans
Loan types
Fixed and variable rates
Variable rates (APR)
5.59% to 17.99% APR (shown with auto-pay discount)
Fixed rates (APR)
4.43% to 17.99% APR (shown with auto-pay discount)
Loan terms
5–15 years
Loan amounts
Minimum is $1,000; Maximum is up to 100% of the cost of attendance
Minimum credit score
Not disclosed
Minimum income
Not disclosed
Allow for a co-signer
Not disclosed
Terms apply.
Pros
- No origination fees or prepayment penalty
- Repayment terms are flexible as long as they're within 5 to 15 years
- Access to a free credit pre-qualification tool
- Mobile app access for managing your loan
Cons
- Interest rates are on the higher end
- No grace period on parent student loans
- Interest-only payments are required while the student is in school
College Ave stands out for allowing borrowers to choose a loan repayment term that works for them as long as it's no fewer than 5 years and no more than 15 years. Borrowers can also pay off their loans early without fear of being hit with prepayment fees.
Compare offers to find the best student loan
More on our top parent student loans
Federal Parent PLUS Loan
Federal student loans like the Federal Parent PLUS Loan have several benefits. For example, you may be entitled to federal protections, like federal forbearance, federal pause on interest and federal loan forgiveness programs that you won't be able to access if you have a private student loan. Federal loans also offer several different repayment plans, such as the Income-Contingent Repayment (ICR) plan, which caps payments at 20% of discretionary income and allows for forgiveness of the remaining balance after 25 years. However, since its interest rates are fixed and there are origination fees, federal loans may not always be the cheapest option.
Eligible borrowers
Biological or adoptive parents of a dependent undergraduate student enrolled at least half-time; must have healthy credit and must be eligible for federal student aid
Loan amounts
Up to 100% of the cost of attendance
Loan terms
10 to 25 years
SoFi
SoFi helps borrowers save money on their loans by not charging origination fees, application fees, insufficient funds fees, prepayment penalties or late fees. But what makes it stand out is its discounts available. Members can get a 0.25% interest rate reduction when signing up for autopay, an additional 0.125% interest reduction for being an existing SoFi member plus an automatic 0.125% discount if they've taken out a SoFi private student loan before. Parents can also redeem SoFi Points to pay down their parent student loans.
Eligible borrowers
Applicants with healthy credit; parent loan borrowers can be a parent, grandparent, aunt, uncle or even a family friend who is willing to apply for the loan.
Loan amounts
Up to 100% of the cost of attendance
Loan terms
5, 7, 10 and 15-year terms
Citizens Bank
Citizens Bank's parent student loan boasts no origination fees, application fees, disbursement fees or prepayment penalties. It also offers a 0.25% rate reduction for enrolling in auto-pay, plus an additional 0.25% for borrowers who already have an account with the bank. One drawback to consider is that unlike some other lenders, which may allow loan amounts of up to 100% of the cost of attendance, Citizens Bank has different loan maximums depending on the type of degree students are pursuing.
Eligible borrowers
U.S. citizens or permanent residents with credit in good standing with a student enrolled in school for at least half-time.
Loan amounts
Loan limits depend on the type of degree the student pursues:
Undergraduate: $150,000
Graduate Degrees: $150,000
MBA and Law: $225,000
Healthcare: $180,000 or $350,000 depending on your degree
Loan terms
5 and 10-year terms
College Ave
College Ave charges no origination fees, offers relatively low interest rates and gives parent student loan borrowers up to 15 years to repay their balance. Borrowers must begin paying at least the interest charges while their student is in school, but can choose to also start repaying part or the full principal. According to College Ave's website, the loan application takes just three minutes to complete and you'll receive an instant credit decision.
Eligible borrowers
Eligible parents, grandparents, guardians, sponsors or other family members must be a U.S. citizen or permanent resident with credit in good standing.
Loan amounts
Up to 100% of the cost of attendance
Loan terms
5 to 15 years
FAQ
Can I take out a student loan without a co-signer?
It's possible to get a student loan without a co-signer as long as the lender's terms allow it. However, co-signers may be encouraged for applicants with less-than-ideal credit to improve their chances of being approved.
Can parent student loans be forgiven?
Federal Parent PLUS Student Loans may be eligible for certain federal forgiveness programs. Borrowers should contact their servicer or visit the Federal Student Aid website for more information on how to qualify.
What is the maximum amount you can borrow for a parent student loan?
The maximum amount you can borrow for a parent student loan will depend on your lender. Most lenders let you borrow up to 100% of the cost of attendance but some have limits on how much you can borrow. Be sure to read the terms before accepting funding.
Do parent student loans come with a fee?
Federal Parent PLUS Student Loans have an origination fee, while some private student loan lenders don't charge any origination fees, application fees, disbursement fees or prepayment penalties.
Bottom line
529 college savings plans and financial aid packages might not always be sufficient to cover your child's higher education. Parent student loans can be a helpful college funding option since it removes some of the repayment burden from students and places it onto the parents. However, before applying for a loan, make sure to review the terms to ensure they best suit your needs and circumstances.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every student loan review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of student loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best student loan lenders.
Our methodology
To determine which parent student loans are best, CNBC Select analyzed and compared parent student loan funding from national banks, credit unions and online lenders. We narrowed down our ranking by only considering those that offer competitive student loan rates and prequalification tools that don't hurt borrowers' credit.
While the companies we chose in this article consistently rank as having some of the market's lower interest rates, we also compared each company based on the following factors:
- What it takes to qualify
- Loan availability by state
- Loan amounts offered
- Loan interest rates (fixed or variable)
- Loan terms in years
- Loan repayment options
- Borrower protections like deferment or forbearance
- Bonus features like autopay rate discounts
Note that the rates and fee structures for private student loans are not guaranteed forever; they are subject to change without notice and they often fluctuate in accordance with the Fed rate. Choosing a fixed-rate APR will guarantee that one's interest rate and monthly payment will remain consistent throughout the entire term of the loan.
A borrower's interest rate depends on their credit score, income, debt-to-income (DTI) ratio, savings, payment history and overall financial health. To take out private student loans, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
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