Parent PLUS Loans vs Private Student Loans - Which is better for FAFSA aid packages?

I chose Parent PLUS loans for both my kids and here's why: 1. Income-driven repayment options if your financial situation changes 2. Death/disability discharge protection 3. Potential for loan forgiveness programs (especially for engineering fields with public service) 4. Fixed interest rate for the life of the loan 5. No prepayment penalties The private loans might advertise lower rates, but those are usually variable and only available to those with excellent credit. With your 735 score, you'd likely get a mid-tier rate that could increase later. One important note: neither loan type will impact future FAFSA calculations, as loans aren't counted as income. However, your debt-to-income ratio might affect your ability to borrow for subsequent years.

AVOID PARENT PLUS LOANS AT ALL COSTS!!!! The interest rates are HIGHWAY ROBBERY (7.54% currently) and they start accruing interest THE MOMENT THEY'RE DISBURSED. My son graduated 3 years ago and I'm still drowning in debt from these loans. I wish I'd shopped around for private loans. My neighbor got one from their credit union at 4.8% fixed. The federal government acts like they're doing you a favor but they're making a fortune off desperate parents.

we did both actually. started w/ private from SoFi for freshman year cuz the rate was better but when rates went up we switched to parent plus for sophomore year. the application process for plus loans was way easier tbh

Having worked in financial aid advising, I'd recommend considering these factors for your specific situation: Parent PLUS Loans: - Pro: Federal protections (deferment, forbearance, some forgiveness options) - Pro: Death/disability discharge - Pro: Fixed interest rate (though higher than some private options) - Pro: 10-25 year repayment terms - Con: 4.228% origination fee is substantial (on $13,500 that's ~$570 in fees) - Con: Higher fixed interest rate than best private options Private Education Loans: - Pro: Potentially lower interest rates for good credit (though often variable) - Pro: Usually no origination fees - Pro: Some allow co-signer release after certain payment periods - Con: Limited hardship options if finances change - Con: Few to no forgiveness options - Con: Variable rates may increase significantly Since your daughter is in engineering, also look into department-specific scholarships for next semester that might reduce your need for either loan type.

My daughter is a junior now and we've done private loans the whole time. BIGGEST MISTAKE EVER!!! Year 1: Got a 4.1% variable rate (seemed great!) Now: Paying 8.75% and it keeps going up! Plus with private loans, if your kid takes a semester off or goes part-time for ANY reason, some lenders can demand immediate repayment. My daughter had health issues sophomore year and we nearly lost everything because of inflexible private loan terms. Apply for the PLUS loan. yes the rate is higher to start but at least you know exactly what you're getting.

Hi there! Just wanted to share my experience trying to get through to someone at Federal Student Aid when I was making this same decision last year. I was on hold for HOURS over multiple days, getting disconnected constantly. It was so frustrating! I finally discovered Claimyr.com which got me connected to a real FSA agent in about 10 minutes. They helped me understand all the Parent PLUS loan details and actually found some additional aid options we hadn't considered. You can see how it works in their video demo: https://youtu.be/TbC8dZQWYNQ Just sharing because making loan decisions without being able to talk to an actual expert is super stressful! Having someone answer my specific questions made a huge difference.

Something nobody mentioned - who's REALLY paying this loan? If YOU (parent) are 100% paying it, then Parent PLUS might make more sense. But if your daughter plans to take over payments after graduation (like many families do), private loans CAN be better bc she could be a co-signer now and then refinance them solely in her name after graduation. You can't transfer a Parent PLUS loan to the student later - it's always legally your debt even if she makes the payments.

engineer major = good choice!! my son did enginering and got a job paying 89k right after college and paid off his loans in 3 yrs. whatever u choose its prolly fine if shes in a field with good job prospecks

One more consideration: if your family might qualify for Public Service Loan Forgiveness in the future (requires working for government or non-profit), only the Parent PLUS loans would potentially qualify if consolidated into a Direct Consolidation Loan and repaid on an income-contingent repayment plan. While engineering isn't typically associated with PSLF, many engineers do work for government agencies (DOT, DOE, military, local governments, etc.) Also, the current administration has been exploring targeted loan forgiveness options. While nothing is guaranteed, federal loans have consistently had more relief options than private loans during economic hardships.