Surveys consistently show that most parents want to help their children pay for college. But if you haven't been saving for years and don't earn enough to sign over a chunk of your income to tuition bills, that help may have to come in the form of taking on debt.

In fact, nearly one in five parents borrow money to pay for their children's college, according to an annual survey by Sallie Mae, with federal parent PLUS loans and private student loans being the most common avenues.

To choose which loan option is best for your family's situation, you need to understand how each works and carefully weigh the pros and cons, particularly as the federal loan landscape shifts in the aftermath of Trump's new spending bill. Our guide below, which includes a list of top private lenders, can help.

Federal loans vs. private loans: How to choose

Students who are borrowing for their undergraduate education should always max out federal student loans before turning to the private market. (The annual federal loan limits vary, but in general, students under 24 can borrow up to $31,000 over the course of their undergraduate education.) For students, private loans are almost always more expensive, and they don't carry the same protections as federal loans.

For parent borrowers, though, the math changes. Some may be best served by sticking with the accessibility in the federal system. But because federal parent PLUS loans carry higher fees and interest rates than undergraduate federal loans, others may be able to get a better deal by turning to private lenders.

Regardless of whether you go the federal or the private route, keep in mind that many financial planners caution parents against borrowing too much to pay for a kid's college degree. If your own finances aren't stable and you don't have much saved for retirement, you may want to consider reevaluating your plans to find a more affordable school that doesn't require taking on parent debt.

Federal parent PLUS loans are relatively easy to access

Parent PLUS loans are offered by the U.S. Department of Education to the parents, including adoptive parents and stepparents, of eligible undergraduate students. They can be used to pay for tuition, dorms (or off-campus apartments), meal plans, books, supplies and fees.

Parent PLUS loans require a very basic credit check that shows you don't have an "adverse" credit history — meaning you don't have any bankruptcies, foreclosures, repossessions or defaults in the last five years. People with lower credit scores still qualify, which opens up borrowing to a wider range of families.

Parent PLUS loans have a fixed interest rate for the length of the loan — for the 2025-2026 school year, this is set at 8.94%. (As with all federal loans, the rates on parent PLUS loans are set once a year. Parent loans always carry a rate that is about two-and-a-half percentage points higher than the rate on undergraduate loans.) Federal parent loans also have a one-time fee that is similar to an origination fee. The fee is currently 4.288%, and it is subtracted from the requested loan amount.

Borrowing limits for parent PLUS loans

Currently, parents may borrow the entire cost of their child's education minus the total amount of financial aid issued by the school. But Republicans’ sprawling new budget plan (officially called the One Big Beautiful Bill Act) changes the limits. For parents taking out their first loan after July 1, 2026, the new limit will be $20,000 per year per dependent student, with a $65,000 lifetime limit per student.

To access parent PLUS loans, your student has to fill out the FAFSA. After getting a financial aid package from your student's college, you can use the online application for a parent PLUS loan or apply through your child's school's application process as specified. Read our full parent PLUS guide for more details.

Paying back parent PLUS loans

Parent PLUS loans may be deferred as long as the student is in school at least half-time or for six months after graduation. During this time, interest will continue to accrue, which is why it’s best to start making payments as soon as you take out the money, if you’re able.

The repayment options for parent PLUS are also changing in the near future, thanks to the new budget bill. Currently, parents have access to these plans:

• Standard: Monthly fixed payment for up to 10 years.
• Graduated: Payments begin as a lower amount and then increase at two-year intervals for up to 10 years. Payments will not be less than the interest accruing between payments or more than three times greater than the preceding payments.
• Extended: Payments may be fixed or graduated and made for up to 25 years. This extended term means payments are generally lower than alternative repayment plans.
• Income-Contingent Repayment (ICR): Sets your payments based on your family size and earnings. To access this plan, parents first have to consolidate their debt into a Direct Consolidation Loan.

Until now, parent borrowers could access Public Service Loan Forgiveness, or PSLF, if they consolidated and enrolled in income-contingent repayment. This program requires 120 qualifying payments, or 10 years’ worth of payments while working in an eligible government or non-profit job.

But the new law blocks parents from accessing PSLF by ending their access to income-driven repayment. If you already have parent loans and consolidate by July 1, 2026, you can still access an income-driven plan (and theoretically still pursue PSLF). But new parent borrowers after this year cannot. They will have access to a singular repayment plan (a revised standard option that has fixed monthly payments for a period of between 10 and 25 years).

Finally, if you need a temporary break from your payments, you can request a forbearance from your loan servicer. While the servicer can technically reject the request, in practice, that's very uncommon. Current rules allow for forbearance periods up to 12 months at a time, with a cumulative three-year limit. For loans issued after July 1, 2027, those limits shrink to nine months within a two-year period for parent borrowers.

Who should take out a parent PLUS loan?

Federal parent loans are best for those who don’t have a "good" or "excellent" credit score that will allow them to qualify for lower rates in the private market. Be careful, though: The federal government doesn’t take into account a parent’s ability to repay, so it’s easy to take on more than you can realistically afford. Map out how much you expect to borrow over four years, then use a loan calculator to estimate your monthly payments. Could you absorb that amount in your current budget? If not, what are you able to change to afford the new bill?

Private parent loans may be cheaper for some

Private student loans are offered by banks, credit unions and online lenders that focus on college financing.

Parents who borrow on the private market have two possible routes: They can look for lenders that have a dedicated parent loan option, where only the parent’s name (and perhaps that of a cosigner) is on the loan, or they can cosign on a student loan and simply make the payments on behalf of their student. In the case of the latter, the loan will be tied to both the student and the parent.

Because eligibility for private loans is determined by a borrower’s credit score and income, it is harder to qualify for a private loan than a federal one.

Loan terms and repayment options will vary by lender, although nearly all lenders offer both fixed- and variable-rate loans. If you cosign on a student loan, you’ll likely have the option to defer payments entirely while the student is enrolled. However, if you take on a parent loan, most lenders require immediate repayment — although they may offer options such as interest-only or flat monthly payments while your student is in school. Lenders typically offer repayment terms of between 5 and 15 years.

Private lenders set their own policies for hardship protections, and they'll handle requests for forbearance on a case-by-case basis. Most limit the time spent in forbearance to about three consecutive months, with a cumulative total of 12 months over the life of the loan.

Who should take out a private parent loan?

Parents with decent income and a strong credit score can save a significant amount of money in the private market as compared to PLUS loans. For example, as of August 2025, private lenders are offering loans starting at 3%. If you can qualify for a 5% fixed rate, and you take out $20,000, you’ll owe about $212 a month on a 10-year term. Run those same numbers with a PLUS loan this year, and you’ll owe nearly $253 per month and end up paying $5,700 more over the life of the loan in interest and fees.

That said, private lenders also charge interest rates that can top 15%. So if you can’t qualify for a private loan that undercuts the rates on PLUS loans, you should stick with the federal option.

Best parent loans for college: Top private lenders

If you decide private loans are the way to go, you’ll want to shop around to find the best deal. You should get a few offers to compare the rates you’re pre-approved for, but you’ll also want to consider details like repayment terms, forbearance or other hardship protections, and whether the lender has any unique perks that appeal to you. Here are some of the best private student loans for parents:

College Ave is Money’s pick for the Best Student Loan for Parents in part because of its customizable repayment term. Parents can choose between five and 15 years, which allows them to pick a term that best fits their budget. For borrowers with excellent credit and strong financial histories, College Ave may be a solid choice. The lender regularly offers some of the lowest starting APRs in the industry. Finally, College Ave says its application and approval process takes just three minutes, so you won’t have to wait to find out if you can move forward with your college planning.

While other lenders have limited repayment options for parents, Earnest has four repayment plans to choose from. And parents have the option of taking advantage of a nine-month grace period, giving them more time after their child graduates before full interest and principal payments are due.

Earnest also has a skip-a-payment feature. All borrowers can skip one payment once per year without penalty or negative effect on their credit. Finally, Earnest offers a rate match guarantee; if you’re approved for a loan with another lender that has a better rate, Earnest will give you a $100 Amazon gift card.

Sallie Mae is a great choice for parents who want to help their student pay for something other than a bachelor’s degree. While Sallie Mae no longer offers a separate parent loan, parents can cosign on loans for career training, medical residency, bar exams and more. Plus, Sallie Mae is one of the few lenders that accept students who are enrolled less than half-time.

RISLA offers a separate parent loan product, but the starting interest rate — currently 5.99% — is much higher than its 2.99% starting rate for student loans. So families considering RISLA may want to consider the cosigning option. Still, RISLA, officially the Rhode Island Student Loan Authority, offers some benefits that make it stand out, even with the higher starting rate for parents. For one, it’s the only private lender to offer an income-based repayment plan as a protection in the event of a financial hardship.

More from Money:

9 Essential Steps to Take Before Choosing a Private Student Loan

Everything You Need to Know About Student Loan Interest

7 Reasons Why Private Student Loans Are Riskier Than Federal Loans