Consider which lender offers the lowest interest rate and loan terms that work best for you. Some lenders offer other benefits, such as due date flexibility and options to pause payments if you lose your job. Compare reputation and reviews and find the best lender for your situation.

A parent is responsible for repaying a parent loan. When it is time to start repaying a parent loan, some lenders allow the student to refinance parent loans into their own name. Keep in mind that refinancing federal loans into private loans means a loss in irreplaceable benefits, including income-driven repayment, potential loan forgiveness and generous deferment periods. A borrower may not qualify for a refinance, though, so it’s best not to count on this.

A fixed rate does not change, but as a variable rate can increase or decrease. A variable rate may seem desirable because it is often lower than a fixed rate, but it is more of a risk, since it could very well increase. A variable rate can change as often as monthly. A fixed rate offers more predictability.

A parent loan is in your name, while cosigning a private student loan will be in your child’s name. Parents are expected to pay the parent loan and the student is expected to pay their own private loan. However, even though you are cosigning, you are still equally responsible for repaying the cosigned loan. The cosigned loan also appears as debt on your credit and lowers your debt-to-income ratio. The student is not obligated to repay a parent loan.

Unlike federal student loans, the Federal Parent PLUS loan does require a credit check. Requirements are less strict for this loan compared to private parent loans, but borrowers must not have an adverse credit history. No credit scores are required. Students and parents must also not be in default on a federal student loan.

The Federal Parent PLUS Loan is available to parents of dependent undergraduate students. Interest rates are fixed and will remain the same for the life of the loan. This loan is unsubsidized and interest starts accruing immediately. Repayment may be deferred while the student is enrolled in college on at least a half-time basis and for six months afterwards.

Federal parent loans are loans made by the U.S. federal government and private loans are made by a private lender, such as a bank or a credit union. The federal loan for parents is called the Federal Parent PLUS Loan. Federal loans, including this one, offer better benefits than private loans, including the possibility of student loan forgiveness, an option to make payments based on your income, and options to postpone payments during times of unemployment and economic hards

Saving for college is a great solution to reducing parent loans, and you can consider opening a 529 college savings plan account. If you haven’t been able to save enough for your child’s college, you can encourage them to apply for as many scholarships as they can. Assist with filling out the FAFSA to apply for grants and work-study opportunities. Talk to your children about choosing an affordable college, staying on track to graduate and reducing expenses as much as possible while they are in school.

Once you and your child exhaust college savings and all other resources (e.g., scholarships, grants, etc.), you may need to borrow a student loan to pay for college costs. A parent loan, like a student loan, enables you to borrow money to help pay for your child’s college costs. You will pay back the total amount at a later date, plus fees and interest. For example, if you borrow a $10,000 parent loan with a 5% interest rate and plan to pay it off over 10 years, you will pay $2,728 in interest over the 10 years that you repay the loan, in addition to repaying the $10,000 principal balance. There are two main types of student loans. Federal student loans are loans made by the U.S. federal government that come with many benefits. Private loans are made by a private lender, such as a bank or a credit union. It is often recommended that you turn to federal student loans before private loans.