Private vs. Federal PLUS

Learn more about the different types of student loans.

If you’ve exhausted free and cheap money for college costs and are still faced with funding gaps, you may be considering PLUS or private student loans. Review the chart below to understand key differences.

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Steps to College Funding

Step 1: FREE Money

Scholarships and grants

Step 2: CHEAP Funding

Federal Direct student loans

Step 3: GAP Funding

Federal PLUS or private student loans

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:

  • Standard Repayment Plan (10 years)
  • Graduated Repayment Plan (10 years)
  • Extended Repayment Plan (Up to 25 years but must meet certain criteria)
  • Additional options may be available under income-driven 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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