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Plus Vs Alternative Loans

It is important to note the differences between the Federal Direct Parent PLUS Loan and an alternative loan through a private lender. Differences in eligibility, interest rates, and repayment schedules exist between the Parent PLUS and alternative loans.  

  • The amount borrowed cannot exceed your cost of attendance minus other financial aid.
  • Alternative loans are based on credit history and student borrowers often require a cosigner.
  • Some lenders offer alternative loan programs for parent borrowers.  It is important to note the differences between the Federal Direct Parent PLUS Loan and an alternative loan through a private lender. Differences in eligibility, interest rates, and repayment schedules exist between the Parent PLUS and alternative loans.
  • Borrowers should exhaust all possible federal and state financial aid funding options before considering alternative loans.  Our office strongly recommends that students complete the FAFSA prior to applying for alternative loans. 
  • Compare variable versus fixed interest rates and be aware of estimated monthly payments after graduation or leaving school.
  • Some lenders will loan to students who are less than half time or not meeting Satisfactory Academic Progress.
  • Remember that a loan is a debt that must be repaid.  We recommend that students and parents borrow wisely.