Parent Plus vs Private Student Loans - Which is better for covering 12K FAFSA gap?

Having helped three kids through college, I'd strongly recommend sticking with federal loans whenever possible. Parent Plus loans do require credit checks, but they offer better protections than private loans. However, Parent Plus loans are legally your responsibility, not your daughter's. If you want the loan in her name, you'll need private loans with you as co-signers. SoFi, Sallie Mae, and Discover are common options. Check if your credit union offers better rates - they sometimes do. Just be aware that as co-signers, you're still legally responsible if she can't pay after graduation.

In my experience Parent Plus loans r the WORST option!!! The interest rates are crazy high (like 7.54% right now) and they start accrueing interest immediately. Plus you cant get rid of them even in bankruptcy!!! I'd check with your credit union first, we got a much better deal that way.

Parent PLUS Loans are in YOUR name only - your daughter has zero legal responsibility. If you want her to be responsible for the debt, your only option is private loans with you as cosigners. Just realize that being a cosigner means you ARE legally responsible if she doesn't pay. There's no scenario where she's 100% responsible and you're not unless you get your name removed as cosigner after she establishes credit (usually takes 2+ years of on-time payments after graduation).

We just went through this with my son!!! The financial aid office kept pushing Parent PLUS but we wanted the loan in his name too. We ended up going with Sallie Mae with us as cosigners. Some important things to know: 1. The interest rates were actually better than Parent PLUS (5.8% vs 6.28%) 2. They do offer no payments until 6 months after graduation 3. BUT the interest accrues during school (same as Parent PLUS) 4. Make sure to check if they offer cosigner release after a certain number of payments Also you can have your daughter pay a small amount during school - like $25/month - which helps build her credit and reduces the overall loan balance!

just make sure ur daughter understands how much she'll owe each month after graduation. my parents cosigned my private loans and i had NO IDEA i'd be paying $950/month after college. can't afford it and now my parents are stuck paying. we should've done the PLUS loans instead tbh

Two things to consider that many families miss: 1. With Parent PLUS, you can use Income-Contingent Repayment plans if you consolidate, which can be valuable if financial circumstances change. Private loans don't offer this protection. 2. If you go private, secure a fixed interest rate, not variable. Interest rates are projected to remain high in the coming years. Also, both options will accrue interest while your daughter is in school. Neither is truly "deferred" in the sense that interest doesn't accumulate. The only loans that don't accrue interest during school are Direct Subsidized loans, which your daughter is already getting as part of her $5,500 package.

ok but has anyone tried calling the financial aid office to negotiate more aid??? sometimes they have emergency funds or can find more scholarships if you explain your situation. i got an extra $3500/year just by calling and explaining my situation!

trying to call financial aid offices is THE WORST. i spent 3 weeks trying to reach someone at my daughters school and kept getting disconnected or sent to voicemail that was full.

One last thought - consider the long-term implications of each option. While private loans may seem better because they're in your daughter's name: 1. Federal loans offer forgiveness options that private loans don't (Public Service Loan Forgiveness, etc.) 2. Federal loans offer income-driven repayment if she struggles after graduation 3. Private loans often have less flexible deferment/forbearance options If maintaining flexibility after graduation is important, that might tip the scales toward Parent PLUS, especially if you plan to help with payments anyway. You could have an informal agreement with your daughter to repay you.

whatever u do DON'T cosign unless your 10000% sure she can pay it back after graduation!! my niece dropped out junior year and now my sister is stuck with 45k of debt from cosigning. at least with parent plus if somethjng happens its already your loan anyway

As someone who just finished navigating this exact situation with my son last year, I'd recommend creating a spreadsheet to compare the total cost of each option over the life of the loan. Don't just look at interest rates - factor in fees, repayment terms, and flexibility options. We ultimately went with a private loan through our local credit union (much better rate than the big names) with us as cosigners. Key things that helped us decide: 1. Our credit union offered cosigner release after just 12 on-time payments post-graduation 2. They allowed interest-only payments during school ($35/month) which kept the balance from growing too much 3. Fixed rate was 2% lower than Parent PLUS at the time Also, make sure your daughter understands she'll be paying roughly $135-150/month per $12k borrowed (depending on the rate and term). Have her look up average starting salaries in her field to make sure it's realistic. The rule of thumb is total student loan payments shouldn't exceed 10% of gross monthly income after graduation.