If your student’s aid package leaves a gap, you’ve probably wondered whether you should borrow to cover it. Parents have two main routes: the federal Parent PLUS Loan and a private parent loan. They work very differently, and the federal rules changed on July 1, 2026, so older advice may no longer apply.
Before borrowing as a parent, make sure your student has taken the federal loans offered in their own name. Our guides to the types of student loans and how to choose a student loan cover that first step.
Federal Parent PLUS Loans
Who qualifies
Parent PLUS Loans are for parents of dependent undergraduate students. Your student has to file the FAFSA, and you apply separately at studentaid.gov. Unlike your student’s own Direct Loans, Parent PLUS requires a credit check, though the test is narrower than a typical lender’s: you can’t have an adverse credit history, which includes things like recent serious delinquencies, defaults, or a federal debt write-off.
What it costs
For loans first disbursed between July 1, 2026 and June 30, 2027, the fixed rate is 9.07%. There’s also an upfront origination fee of roughly 4%, deducted from each disbursement, so you receive less than you borrow. Check studentaid.gov for the current fee, since it’s adjusted periodically.
New borrowing limits
Until this year, parents could borrow up to the full cost of attendance minus other aid. For new loans, the caps are now $20,000 per year and $65,000 per student. Parents of full-time students can reach that lifetime cap by their student’s third year, so the amount your family can raise through Parent PLUS may fall short of the full gap. A limited exception applies to parents who already borrowed Parent PLUS for that student before July 1, 2026, so ask your school’s financial aid office whether it applies to you.
How repayment works
Repayment starts shortly after the loan is fully disbursed. You can ask for a deferment that lasts while your student is enrolled at least half-time and for six months afterward, but interest keeps accruing during that time.
For new Parent PLUS loans, the options are narrow. They must be repaid on the Standard plan, which has fixed terms of 10 to 25 years depending on the amount borrowed, and they aren’t eligible for the new Repayment Assistance Plan (RAP). Forgiveness options for new Parent PLUS loans are extremely limited, so plan on repaying the full balance.
If you’re denied
A denial doesn’t end the road. You can add an endorser with acceptable credit (it can’t be your student), document extenuating circumstances, or appeal the decision. With an endorser or approved extenuating circumstances, you’ll complete PLUS credit counseling. If you can’t get approved, your student may become eligible for additional Direct Unsubsidized Loan amounts, which are normally available only to independent students.
Private Parent Loans
Private parent loans come from banks, credit unions, and online lenders. The parent is the borrower, and the rate depends on your credit, income, and the term you choose.
- Rates can be fixed or variable. Fixed rates stay constant. Variable rates can start lower but can rise.
- Limits are set by the lender. Many will lend up to the cost of attendance minus other aid, which can be more than Parent PLUS now allows.
- Protections are the lender’s call. Private loans don’t come with federal deferment, forbearance, or any federal forgiveness. Ask what happens if you lose income.
- Parents with strong credit may find lower rates than 9.07%, but rates move constantly, so get actual quotes instead of assuming.
When comparing, look at the total cost (rate plus fees), whether the rate is fixed, the repayment term, and whether the lender offers hardship options. Most lenders let you prequalify with a soft credit check, which won’t affect your score.
A Third Option: Cosigning Your Student’s Loan
Instead of borrowing yourself, you can cosign a private loan in your student’s name. The student is the primary borrower and builds their own credit, but you’re legally on the hook if they stop paying. Ask whether the lender offers cosigner release, which removes you after a set number of on-time payments. Note that a cosigned loan shows up on your credit report too. Our guide to how student loans affect your credit score explains what that means in practice.
How to Decide the Best Loan Options for Your Family
- Max your student’s own federal loans first. They’re cheaper than Parent PLUS, with no credit check.
- Price the gap. After grants, scholarships, savings, and your student’s loans, how much is left? If it’s within the Parent PLUS caps, you have both options. If not, a private loan may be your only way to close it.
- Compare real numbers. Take the 9.07% rate plus the roughly 4% fee for Parent PLUS and compare it to quotes from two or three private lenders for the same amount and term.
- Weigh protections against price. If a private loan is cheaper but you’re concerned about job security, deferment and forbearance on a federal loan may be worth the extra cost.
- Borrow only what you need. A smaller loan today means a smaller payment through your own peak earning and retirement-saving years.
If You Already Have Parent PLUS Loans
The rules for existing borrowers are more complicated, and they’re time-sensitive. Taking out a new Parent PLUS loan after July 1, 2026 can affect the repayment options on your older ones, and consolidation rules have changed. Before you borrow again, talk to your loan servicer. Refinancing a Parent PLUS loan into a private loan can lower your rate, but it permanently ends federal protections, so weigh that carefully.
Other Ways to Close the Gap
- Ask the school’s financial aid office whether they’ll review your aid offer if your circumstances have changed
- Use the school’s tuition payment plan, which often spreads costs over several months without interest
- Have your student apply for more scholarships
- Review lower-cost options for the remaining years
For a full overview of federal and private options, visit our student loans resource hub.
