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The desire to help your kid pay for college so they can focus on their studies is a strong one, but it’s important to consider your options when it comes to borrowing money. Parents have a couple of options for borrowing to help pay for their child’s college education. They can borrow a Parent PLUS Loan — a type of federal loan — or a private student loan to help their child pay for college. Though, it may not always make sense for parents to take on debt on behalf of their child’s education.

Read on for a high-level overview of which types of student loans you could apply for, as well as some advantages and disadvantages of taking out those loans in your name.

What Are Parent Student Loan Options?

As mentioned, parents interested in borrowing a loan to help their students pay for college have two main options. The first is a Parent PLUS loan, a federal loan available through the Direct Loan program. The other is borrowing a parent loan from a private lender.

Parent PLUS Federal Student Loans

Parent plus loans are a type of federal student loan that can be borrowed by the parent of an undergraduate student to help their child pay for college education costs. The benefits of a Parent PLUS loan can include:

•   A fixed interest rate (for loans first disbursed on or after July 1, 2023, and before July 1, 2024, the interest rate is 8.05%)

•   Deferment under certain conditions

•   Flexible repayment options

•   Possible eligibility for Public Service Loan Forgiveness

To apply for a Parent PLUS loan, your child must first file the Free Application for Federal Student Aid, also known as FAFSA®. Then, eligible parents of undergraduate students can fill out the Direct PLUS Loan Application online.

It’s not possible to transfer a Parent PLUS loan to your child. However, Parent PLUS refinancing with a private lender may allow your child to refinance a Parent PLUS loan in their name.

Keep in mind that your child may be eligible for federal student aid including federal loans, scholarships, and grants too. If your child is taking out federal student loans, they may be eligible for:

•   Direct Subsidized Loans. These loans are subsidized by the federal government and students are not responsible for paying accrued interest while they are enrolled, during the loan’s grace period, or during qualifying terms of deferment.

•   Direct Unsubsidized Loans. These loans are not subsidized by the federal government and student borrowers are responsible for accrued interest costs on the loan while they are enrolled in school.

•   Direct PLUS Loans (for graduate school). These loans are available for graduate students.

Depending on demonstrated financial need, your child may qualify for a combination of these loan types in addition to scholarships, grants, or work-study. However, if all other federal aid is exhausted, the Parent PLUS loan might be an option to supplement your child’s tuition payments after federal aid, scholarships, or grants.

Private Student Loans for Parents

When federal student loan options are exhausted, some students and parents may turn to private loans to help fund their education. Parents can take out a private loan in their own name to pay for college for their student. If you have a strong credit history, you might consider a private loan over the PLUS loan — there’s a chance you could potentially qualify for a lower interest rate.

With a private student loan, you may have the option of a fixed- or variable-rate loan, potentially giving you more flexibility on repayment. With a private student loan, you might have the chance to choose the term length of a loan as well.

Your child can also apply for private loans, but in many cases, they’ll require a cosigner.

Private Student Loans for Parents vs Parent PLUS Loans

This table provides a high-level overview of the differences between private student loans for parents and Parent PLUS loans.

Pros and Cons of Taking the Loan Out in Your Name

Taking out a student loan for your child in your name — federal or private — could mean less of a financial burden on your child as they enter college. Since the loans are in your name, it’s not up to your child to pay them, even after a degree is earned.

The Pros

Borrowing can be a tool to help you pay for your child’s education. If you can afford to make the loan payments without sacrificing your own financial security, this could be a helpful move for your child.

Another pro is that the loan payments will be made in your name — that means they’ll count toward your credit history. If you’re able to make all of the loan payments on-time, it could prove to have a beneficial impact on your credit score.

If you have a strong credit history, you could potentially qualify for a more competitive interest rate than your child could.

The Cons

The most obvious con is that while you’ll be able to help your child pay for college, you’ll need to repay the money with interest. Other types of aid like scholarships, grants, and Direct Subsidized or Subsidized loans borrowed by your child are generally prioritized over a parent loan.

Again, because the loan is in your name, any late payments or issues will be attributed to your personal credit history. Things like late payments have the potential to impact your credit score.

There’s nothing wrong with wanting to borrow for your child’s future, just consider all your options and think about what you, or they, can afford to pay back. It’s almost always a good idea to maximize federal aid and scholarships before resorting to loans of any kind.

The following table provides an overview of some of the pros and cons for borrowing as a parent to help your student pay for college.

The Takeaway

Parent PLUS Loans are federal loans that allow parents of undergraduate students to help pay for their child’s education. These loans have a fixed interest rate and are eligible for most federal repayment plans.

Parents with a strong credit history may be able to qualify for more competitive interest rates through a private student loan. SoFi offers student loans for parent borrowers. There are no fees, competitive rates for qualifying borrowers, and applications are entirely online.

FAQ

Which type of student loans can parents take out on behalf of the student?

Parents with undergraduate students have two options for borrowing to help their child pay for college. They can borrow a Direct PLUS loan through the federal government or a private loan from a private lender.

Who is responsible for paying back Parent PLUS loans?

Parent PLUS loans are in the parent’s name. The parent is solely responsible for repaying the loan.

What to do if you aren’t able to take out a Parent PLUS loan?

If you aren’t able to borrow a Parent PLUS loan you can consider adding a cosigner to your PLUS loan application. This may help your chances of getting approved. Additionally, if you are applying for a private loan, you may have the option of adding a cosigner which could potentially improve your chances of gaining approval or securing a more competitive interest rate.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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If you’re planning to take out student loans to help pay for college, you’re probably wondering: How long does it take to get student loans? and when should I submit my application?

Understanding the time involved can be critical, especially if your tuition will soon be due.

Getting a Student Loan: How Long Does it Take?

The timing for student loans can vary, depending on whether you’re taking out private or federal student loans. Also, the process itself takes time because you need to apply for the loan, get approved, and then wait for your loan funds to be disbursed. In total, it can take weeks or sometimes even longer.

Federal student loans are generally disbursed once per term. The process for private student loans may depend on the lender.

💡 Quick Tip: When shopping for a private student loan lender, look for benefits that help lower your monthly payment.

Does the Length of Time Vary Between Loan Types?

The wait time on receiving student loans depends on the type of loans and the loan source. The federal government is the most common source for student loans since it usually offers the lowest fixed interest rates and the most flexible repayment plans.

Additionally, there are also private lenders that offer private student loans. This student loans guide can be helpful for understanding how private student loans work and how they differ from federal loans.

You can also look into student loan and scholarship information to help cover the costs of college.

How Long Does It Take to Get a Federal Student Loan?

Applying for federal student loans is generally a straightforward process. You start by filling out a Free Application for Federal Student Aid (FAFSA®).

Even if you think you won’t qualify because of your household income or high school GPA, it doesn’t hurt to submit the FAFSA because it’s free. You may even discover that you’re eligible for federal aid like grants and work-study, and therefore you might not need as many loans as you thought. Along with your eligibility for federal aid, the FAFSA application will also let you know your federal student loan options.

But how long does it take to get a student loan? Depending on how the FAFSA is submitted, the wait time can range from about five days to over two weeks. Applications submitted online may be processed as soon as three to five days. Those submitted by mail may take up to 10 days.

Once the FAFSA is processed, students will receive a Student Aid Report (SAR), the expected family contribution and student eligibility for Pell Grants. Colleges listed on the FAFSA will receive a copy of the SAR and they’ll use this information to determine the exact type and amount of federal aid a student is eligible for.

Generally, the student’s college will disburse federal student loan funds at least once per term. Some colleges may be subject to a 30-day delay (past the first day of the payment period) when it comes time to disburse funds among first-time borrowers.

The FAFSA is available on October 1 for the next school year, and the deadline for submitting it is June 30th of the following year. However, colleges may have earlier deadlines for submission, so be sure to check.

💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

How Long Does It Take to Get a Private Student Loan?

Private loans, which can include graduate loans, come from private (aka non-government) lenders who don’t have the same set standards as federal loans. No private lender functions exactly the same as the next when it comes to interest rates and payment plans, which includes when you’re required to begin student loan repayment.

When applying for a private loan, it’s very important that you clearly read the contract and know when loan repayment is expected. Private loans may not have the six-month grace period that federal loans offer.

And they won’t necessarily offer fixed interest rates, which means your interest rates could increase over time if you opt for a variable-rate loan.

How long do student loans take to process? Because each lender will have different application requirements and payment processes, there is no specific timeline for receiving your funds. However, you can generally expect that your private lender will send your loan funds to your college or university anywhere from two to 10 weeks from the date your loan application is approved.

Private lenders may offer school-certified loans or direct-to-consumer loans. When borrowing a school-certified loan, the loan amount is disbursed directly to the school. Direct-to-consumer loans are disbursed directly to the borrower.

The Takeaway

When applying for a federal loan using the FAFSA, it may take anywhere from a few days to two weeks to find out what types of loans you’re eligible for. The loans will then be disbursed directly to your school, at least once per term. If you have questions, contact the financial aid office at the school.

The application process for private student loans varies from lender to lender. It can take anywhere from two to 10 weeks for the loan to be disbursed once the loan application has been processed.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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When the amount a student can borrow isn’t enough to cover the cost of attendance, parents may decide to take out additional loans. Parents of dependent undergraduate students can apply for a Direct PLUS Loan. PLUS Loans may also be offered to graduate and professional students, these are commonly referred to as grad PLUS Loans.

Parent borrowing has steadily increased in recent decades. There are about 3.7 million borrowers of the parent PLUS loan, according to the most recent federal data from the last quarter of 2022.

What Are Parent PLUS Loans?

A Parent PLUS Loan is a type of loan that is part of the Direct Loan program administered by the U.S. Department of Education. As mentioned, PLUS Loans can be borrowed by parents of undergraduate students. Graduate and professional students may also be eligible for PLUS Loans.

Parent PLUS Loans generally have higher interest rates than other Direct Loans. For Parent PLUS loans issued in the loan year starting July 1, 2023, the interest rate is 8.05%, while the interest rate for Direct Subsidized and Unsubsidized Loans to undergraduate students is 5.50%.

Interest rates for federal student loans are fixed, meaning they stay the same over the entire term of the loan. You generally can’t transfer a Parent PLUS Loan to your child down the line, but your child may be able to apply for student loan refinancing later on and, if they qualify and it makes sense to do so, use it to pay off the loan.

How Much Can You Borrow for a Parent PLUS Loan?

Congress established the Parent PLUS Loan program in 1980 with caps on how much parents could borrow. Those limits were eliminated in 1992. Parents are now able to borrow up to the full cost of attendance at their child’s institution (which the school determines), after any other financial aid the student receives.

Parent PLUS Loan Eligibility Requirements

Credit Score Requirements

While there is not a specific credit score requirement for borrowing a Parent PLUS Loan, borrowers with an adverse credit history may not qualify to borrow this type of loan. The U.S. Department of Education defines an adverse credit history as meeting any of the following criteria:

•   Having accounts with a total balance of more than $2,085 that are 90 or more days delinquent, or debts that have been placed in collections or have been charged off within two years of the date of the credit report

•   Having defaulted on a loan within five years of the credit report

•   Filed for bankruptcy within five years of the credit report

•   Experienced repossession or foreclosure within five years of the credit report

•   Having charged-off a federal student loan within five years of the credit report

•   Experienced wage garnishment or a tax lien within the five years prior to the credit report

Full details on PLUS Loan eligibility and adverse credit history can be found on the StudentAid website .

Parents with an adverse credit history who are denied a Parent PLUS Loan may be able to qualify for a Parent PLUS Loan if they add an endorser or provide supporting documentation to the U.S. Department of Education that indicates there are extenuating circumstances surrounding the adverse credit history.

Who Can Apply for a Parent PLUS Loan?

To apply for a Parent PLUS Loan, potential borrowers must be the biological, adoptive, or in certain situations the stepparent, of a dependent undergraduate student. The student must be enrolled in a participating school at least half-time.

Unless a grandparent has legally adopted the student, they are unable to borrow a Parent PLUS Loan.

Other Eligibility Criteria for Parent PLUS Loans

In addition to being the parent of the student and not having an adverse credit history, parent-borrowers also must meet the basic eligibility requirements for federal student aid , such as being a U.S. citizen or eligible non-citizen.

What If You Aren’t Eligible for a Parent PLUS Loan?

If you aren’t eligible for a Parent PLUS Loan, review the student loans, scholarships, and grants available to your undergraduate students. If these options are not enough to cover the cost of tuition and other expenses, you might consider borrowing a private parent student loan to help your child pay for their education.

Private student loans are awarded by private lenders based on personal financial factors such as income and credit score, among others.

Applying for a PLUS Loan

Before applying for a Parent PLUS Loan, ensure your child has completed their Free Application for Federal Student Aid (FAFSA®). Once this has been completed, you can apply for a Parent PLUS Loan. Typically, you’ll fill out an online application at StudentLoans.gov , though some schools have a different process and require you to request a loan through the institution’s financial aid office.

Recommended: When To Apply for a Parent Plus Loan

StudentLoans.gov has a list of all schools that allow you to apply through the website. If you have any questions, contact the financial aid office at your child’s school. When the loan is disbursed, you’ll have to pay a loan fee, which is 4.228% of the loan amount, if disbursed on or after October 1, 2020.

Pros and Cons of a Parent PLUS Loan

As with most financial decisions, there are pros and cons to Parent PLUS Loans.

Pros of a PLUS Loan

One of the biggest benefits of Parent PLUS Loans is that they allow parents to borrow up to the cost of attendance to help their child pay for college.

Another pro is that there are no minimum credit score requirements. While there is a credit check, so long as parents meet the adverse credit requirements, they stand a reasonably good chance of being approved for a parent PLUS Loan.

When repaying Parent PLUS Loans, borrowers have a few different repayment options available to them, which can offer flexibility. PLUS Loans are eligible for the standard, graduated, or extended repayment plans. And if Parent PLUS Loans are consolidated into a Direct Consolidation Loan, they can be enrolled in an income-contingent repayment plan, which is one of the income-driven repayment plans available for federal student loans.

Cons of a PLUS Loan

One negative is that Parent PLUS Loans cannot be transferred to the student borrower. They are the responsibility of the parents, and they are legally responsible for repaying the loan.

Parent PLUS Loans, as mentioned, have an origination fee.

Another con is that parents are expected to begin repayment as soon as the loan is disbursed. While it is possible to apply for a deferment, interest will continue to accrue during this time.

SoFi Private Student Loans

When evaluating private student loans vs. parent PLUS loans, generally, federal student loan options are a strong starting place for most borrowers. That’s because federal student loans come with many important protections and often with lower interest rates. Students and parents who have exhausted their federal aid options may want to consider taking out loans from a private lender.

Student loans with SoFi offer competitive interest rates to qualifying undergrads, graduate students, and parents. Student loans can be used to cover up to 100% of school-certified costs which typically include things like tuition, books, supplies, room and board, food, and other education expenses.

SoFi doesn’t charge any fees related to private loans, meaning no origination fees or application fees. There are no prepayment penalties, and typically the sooner you pay off your loan, the less you pay overall.

You can choose from several repayment options, and it’s quick and easy to apply online.

FAQ

Does everyone automatically get approved for Parent PLUS loans?

No, not everyone gets approved for a Parent PLUS Loan. In addition to being the parent of an undergraduate student and meeting basic eligibility requirements, the U.S. Department of Education requires that parent borrowers not have an adverse credit history in order to borrow a PLUS Loan.

Parents who are denied from borrowing a Parent PLUS Loan because of an adverse credit history may be able to add an endorser to their application or file paperwork with the Department of Education to prove there were or are extenuating circumstances related to their adverse credit history.

Are Parent PLUS loans based primarily on income?

There are no specific income requirements for borrowing a Parent PLUS Loan.

What is the maximum borrowable amount of Parent PLUS loans?

Parent borrowers can borrow up to the full cost of attendance as defined by your child’s school, less any other financial aid your child has received.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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