Top Parent Loan Options for Funding Your Child’s Education

Explore Leading Parent Loan Choices for Funding Your Child’s College Education

When considering loans to support your child's higher education, it's essential to evaluate all available options before selecting a lender. Both federal and private lenders provide parent-focused student loan programs worth exploring.

Some prominent options include:

Federal Direct Plus Loans
Established in 1980, the federal government offers parent loans known as Direct Plus Loans. For the 2016-17 year, interest was 6.31%, with an origination fee of 4.28%. These loans typically have a 10-year repayment plan. Eligibility requires a clean credit history without bankruptcy or unpaid debts.

Note that applicants with strong credit scores may not receive the lowest interest rates. Interest rates for federal Direct Plus Loans stay consistent annually and are influenced by market conditions. Payments begin immediately after disbursement, but deferment options are available up to six months post-graduation.

College Ave Parent Loans
Founded in December 2014, College Ave offers innovative parent loans without origination fees. Their variable Annual Percentage Rate (APR) ranges from 4.03% to 6.03%, with a fixed rate of 6.54%. Loan terms are flexible, spanning 5 to 12 years. To qualify, applicants should earn at least $70,000 annually and have a credit score in the mid-700s. Borrowers can choose to pay immediately, interest-only, or make payments based on affordability. Visit College Ave’s website for detailed information.

SoFi Parent Loans
Since 2011, SoFi has been offering some of the lowest interest rates for parent loans, with variable APRs from 2.95% to 6.13% and fixed options of 4.25% or 7.75%. Loan durations include 5- or 10-year terms. However, note that SoFi does not provide forbearance options if repayment difficulties arise. To apply, complete the FAFSA to determine eligibility.