If you’re trying to navigate student loans for parents to help your child pay for college, you might be in for a rude awakening.
The cost of college has skyrocketed. Tuition for in-state students at a four-year public college costs an average of $10,230, but that jumps to $26,290 for out-of-state students.
If you need to borrow money to pay for your kid’s college, a parent PLUS loan can be a great option. With the ability to consolidate your loans to get access to income-driven repayment plans and Public Service Loan Forgiveness, you’ll have a lot of flexibility.
But some private parent student loan companies offer lower interest rates than those you’ll find for parent PLUS loans. Plus, you might be able to escape the latter’s 4.248% origination fee (it drops to 4.236% for loans disbursed on or after October 1).
We’ll take a look at some private student loan companies that have offerings for parents.
1. SoFi parent loan
2. College Ave parent loan
3. Sallie Mae Parent Loan
4. Citizens Bank parent loan
4 of our favorite student loan companies for parents
As you compare the following private student loans for parents, consider the interest rates, fees and other terms and features to determine which option is best for you.
Keep in mind: A search for the best private student loans for bad credit will typically prove futile. You most likely need a decent credit score or a cosigner to qualify.
| Lender | Variable APRs | Fixed APRs | Repayment Terms | Notes |
|---|---|---|---|---|
| SoFi | 2.31%– 6.88% | 3.46%– 6.88% | 5-15 years | Allows interest-only payments while your child is in school |
| College Ave | 2.72%– 10.88% | 4.64% – 12.01% | 5-15 years | Allows up to $2,500 of loan to cover other educational expenses |
| Sallie Mae | 5.12% – 11.74% | 5.49% – 12.87% | 10 years | Doesn’t allow you to prequalify with a soft credit check |
| Citizens Bank | 2.29% – 6.99% | 3.45% – 6.99% | 5 or 10 years | Offers an extra 0.25 percentage point interest rate reduction if you have an eligible Citizens Bank account |
1. SoFi parent loan
SoFi is one of the largest student loan refinancing companies in the industry, but it also offers private student loans.
Interest rates and fees
You can choose between a variable and fixed APR:
- Variable: 2.31%– 6.88%
- Fixed: 3.46%– 6.88%
These rates include a 0.25% reduction, which you qualify for when you set up autopay. Also, you can get an idea of what kind of rate you’d qualify for without a hard credit check, so your credit score won’t be affected.
SoFi doesn’t charge application or origination fees, and there are no prepayment penalties.
Other terms and features
You can borrow as little as $5,000 (the minimum may be higher in some states) or enough to cover the cost of attendance for your child. Parents can make interest-only payments while their child is still in school.
You can choose a repayment term of five, 10 or 15 years.
2. College Ave parent loan
If you want a little more flexibility with your payments, College Ave offers three repayment plans from which you can choose:
- Interest-only payment: Pay just the interest charges while your child is in school
- Interest-plus payment: Pay enough to cover the interest charges, and then you can set your own monthly payment (in $20 increments)
- Full principal and interest payment: Start making full payments right away
Interest rates and fees
Although they aren’t as low as SoFi’s rates, College Ave’s APRs are competitive. You can choose between a variable and fixed APR:
- Variable: 2.72%– 10.88%
- Fixed: 4.64% – 12.01%
These rates include a 0.25% interest rate reduction for setting up autopay. You can get prequalified for an interest rate through College Ave’s website with a soft credit check.
There are no application or origination fees or prepayment penalties.
Other terms and features
College Ave parent loans start at $1,000 and can cover up to 100% of the school’s cost of attendance. It also can send you up to $2,500 directly to cover other educational expenses, such as books and electronics.
You can choose from 11 repayment terms between five and 15 years. This allows you more flexibility than what many student loan companies offer.
However, if you can qualify for a lower interest rate elsewhere, it might be worth giving up some repayment flexibility.
3. Sallie Mae Parent Loan
Just like College Ave, Sallie Mae offers loans for parents as low as $1,000 and up to your child’s school-certified cost of attendance. Sallie Mae allows you to choose between an interest-only payment while your child is in school or a full payment from the get-go.
Interest rates and fees
Sallie Mae offers both variable and fixed APRs. You might qualify for a rate within the following ranges:
- Variable: 5.12% – 11.74%
- Fixed: 5.49% – 12.87%
The lender offers a 0.25 percentage point interest rate reduction when you set up autopay. Like the other lenders listed, Sallie Mae doesn’t charge an application or origination fee and won’t penalize you for paying off your loan early.
Other terms and features
One drawback to the Sallie Mae Parent Loan is that it doesn’t allow you to prequalify with a soft credit check. That means you have to apply to see if you’re approved and find out the rate for which you could qualify. If you’re concerned about inquiries on your credit report, Sallie Mae might not be a great fit.
You also have only one choice for your repayment period: 10 years. Of course, you can pay off the loan earlier if you wish, but you have less flexibility when determining your monthly payment.
4. Citizens Bank parent loan
If you’re already a Citizens Bank customer, applying for its student loan for parents could score you a lower interest rate.
Besides its 0.25 percentage point interest rate reduction for signing up for autopay, the bank offers an extra 0.25 percentage point discount if you have a qualifying account when you apply for the loan.
Interest rates and fees
- Variable: 2.29% – 6.99%
- Fixed: 3.45% – 6.99%
Citizens Bank’s rates include the 0.50 percentage point reduction for the loyalty and autopay discounts.
The bank doesn’t charge application or origination fees, and there are no prepayment penalties.
Other terms and features
You can choose a five- or 10-year repayment plan. You can pay interest only while your child is in school or start making full payments immediately.
Also, like Sallie Mae, Citizens Bank doesn’t allow you to see your potential offer until you officially apply. That can make it harder to shop around.
Which private student loans for parents are best?
When looking at private student loan companies that offer parent loans, there’s no one best lender. Each lender has different features and criteria for determining your loan terms. While one might offer lower interest rates, that doesn’t mean you’ll qualify.
To make sure you get a great deal on your parent loans for college, shop around and compare different companies and what they have to offer. For companies that offer prequalification, get an idea of the interest rates for which you’d qualify. As you do this with several companies, you’ll have a better idea of which loan is a good fit for you.
Sarah Li Cain contributed to this report
Need a student loan?
Here are our top student loan lenders of 2020!| Lender | Variable APR | Eligibility | |
|---|---|---|---|
| * The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers. 1 Important Disclosures for College Ave. CollegeAve DisclosuresCollege Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation. (2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. (3)As certified by your school and less any other financial aid you might receive. Minimum $1,000. Information advertised valid as of 11/4/2019. Variable interest rates may increase after consummation. 2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply. 3 Important Disclosures for Discover. Discover Disclosures
4 Important Disclosures for CommonBond. CommonBond DisclosuresOffered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
5 Important Disclosures for Citizens. Citizens DisclosuresUndergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2019, the one-month LIBOR rate is 1.70%. Variable interest rates range from 2.80% – 11.06% (2.80% – 10.91% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.72% – 12.19% (4.72% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan. Please Note: International Students are not eligible for the multi-year approval feature. |
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 | 2.84% – 10.97%1 | Undergraduate, Graduate, and Parents | |
 | 2.87% – 10.75%*,2 | Undergraduate and Graduate | |
 | 2.80% – 11.37%3 | Undergraduate and Graduate | |
 | 3.52% – 9.50%4 | Undergraduate and Graduate | |
 | 2.80% – 11.06%5 | Undergraduate and Graduate | |
