Steps to College Funding
Federal Direct PLUS Loan |
Private or Alternative Loan |
|
|---|---|---|
| FAFSA Required | Yes | Recommended |
| Who is the lender? | U.S. Government | Credit unions, banks, and other finance companies |
| Who can borrow? | Available to parent of undergraduate student and graduate or professional students | Available to eligible borrowers – varies by lender |
| Who is the borrower? | The parent (or graduate student) is the borrower. | The loan is in the student borrower’s name, though a co-borrower may be needed to meet credit requirements. |
| Credit Check | Yes – Credit score and debt to income not considered, but borrower cannot have adverse credit history | Yes – Full credit check – credit score, employment, income and established credit considered |
| Interest rate/fees | View current rates on the federal government’s website. There is a loan fee added to PLUS loans. | May be fixed or variable depending on the lender. Rates vary based on the lender and your circumstances. |
| Deferral while in school | Parent PLUS: full repayment after borrowing; deferment or interest-only payments by request. Grad PLUS: full deferment after borrowing until six months after separation from school. |
Some lenders require payments while attending school; others allow a deferment option. |
| Repayment Terms | Eligible for the following repayment plans:
|
You should check with your lender to find out about your repayment options. Private loans often have options for longer repayment terms. For example, your education line of credit has a repayment term of 10 years for fixed rates and 20 or 25 years based on loan balance for variable rates. |
| Loan Forgiveness | You may be eligible to have some portion of your loans forgiven if you work in public service. | Although many private lenders do not offer loan forgiveness programs, some student loans can be forgiven in certain circumstances. |
| Learn More | studentaid.gov | View more information on your lender’s website. |
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