College Planning & Financial Aid
Getting a Student Loan

Parent PLUS Loans and Other Student Loans for Parents

March 1, 2019


One of the biggest things on your mind as a parent is probably supporting your child through college. A potential way to do this is by using college savings accounts to save money for tuition, textbooks, and other education-related expenses. However, savings accounts are only useful if you have time to plan ahead for your child’s college education, and enough disposable income that you can comfortably set aside money month-over-month.

Fortunately, there are other ways to help your child pay for college: student loans for parents. Usually, when we think of student loans, we think about all the debt being taken on by the students themselves. However, many people don’t realize that parents are also eligible for some types of student loans. Student loans for parents can sometimes have better repayment terms than ordinary student loans, and they can potentially help your child graduate from college debt-free.

Parent PLUS Loans

The most popular student loan for parents is the Parent PLUS Loan program, offered by the Department of Education to parents of college students. PLUS Loans are also available to graduate and professional students.

Differences from Other Student Loans

Federal student loans are unique because they do not require a credit check. Typically, lenders will check a borrower’s credit history before approving a loan or agreeing to repayment terms. A high credit score can put lenders at ease, while a low credit score can make it difficult for borrowers to qualify.

Since students are often young, they don’t always have extensive credit histories. Therefore, private lenders may require that these students’ loans be cosigned. Federal student loans, on the other hand, do not require cosigners since they are based on the financial needs of the student rather than on the student’s credit history.

This is one area where Parent PLUS Loans are different from other federal student loans. Parent PLUS Loans will require a credit check. A poor credit score can disqualify you for Parent PLUS Loans. If you are eligible, your credit score will affect the interest rate on your loan. In 2018, the interest rate for Parent PLUS Loans was 7.6 percent.

How to Get a Parent PLUS Loan

In order to apply for a Parent PLUS Loan, you must have your child fill out their FAFSA. FAFSA is a tool that the Department of Education uses to determine the need for financial aid. Most available loans will be viewable on your student’s page after their FAFSA has been processed. However, if you are interested in receiving a Parent PLUS Loan directly, you will have to request it. Different schools have their own processes for requesting Parent PLUS Loans, so be sure to contact your child’s school’s financial aid office to find out more.

Once you have received your Parent PLUS Loan, the money will be distributed directly to the educational institution that your child is attending. If there is any money left over after tuition and fees have been paid, you will receive that amount in a student loan refund. However, keep in mind that this money is intended for expenses related to your child’s education. This can include tuition, fees, school materials such as textbooks, or living expenses.

Transferring Parent PLUS Loan to a Student

Sometimes a parent may take on student loan debt to help their child get started, but after graduation, and once the child has a career of their own, it makes sense to transfer that debt over to the former student.

There is no mechanism built into Parent PLUS Loans that allows them to be transferred. Fortunately, you can sometimes use student loan refinancing to transfer the debt. Refinancing for student loans works by creating a new loan to immediately pay off the debt of your student loan. This new loan comes with new terms that you negotiate with the refinancer, and that can include whose name the debt is in. Just remember that you need your child’s permission before refinancing your Parent PLUS Loans in their name.

Other Student Loans for Parents

Parent PLUS Loans aren’t the only student loans available for parents. It’s also possible to get a private student loan in your name and use it to pay for your child’s college education. Private student loans are loans for education-related expenses that come from a private lender. This is different from other student loans, which are distributed by the federal government.

Unlike federal student loans, private student loans will take your credit score into account. This makes it advantageous for a parent with a long credit history to either apply for the loans or plan on cosigning their child’s private student loans. However, ParentPlus has a credit component

If you would rather avoid student loans and you don’t have enough money in your college savings account, there are still other ways to help your child pay for college.

Please note that the information provided on this website is provided on a general basis and may not apply to your own specific individual needs, goals, financial position, experience, etc. LendKey does not guarantee that the information provided on any third-party website that LendKey offers a hyperlink to is up-to-date and accurate at the time you access it, and LendKey does not guarantee that information provided on such external websites (and this website) is best-suited for your particular circumstances. Therefore, you may want to consult with an expert (financial adviser, school financial aid office, etc.) before making financial decisions that may be discussed on this website.