| Loan Interest Rate | Parent PLUS Loan Fixed at 9.08% (After July 1, 2024) | Alternative Loan Variable, usually no cap. Many programs reset quarterly. Varies from lender to lender. Some lenders also offer a fixed-rate loan. |
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| Loan Borrower | Parent PLUS Loan The parent is the borrower and the loan is in the parent's name. | Alternative Loan The student is the borrower. While the loan is in the student's name, usually a parent is included as a co-signer. Co-signer bears equal responsibility for loan repayments. Generally, a student might receive a better interest rate with a credit-worthy co-signer. |
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| Credit Check Required | Parent PLUS Loan No, but a parent with adverse credit history may obtain an endorser. | Alternative Loan Varies by lender, but a student with little or no credit history may have a better chance of approval by applying with a creditworthy cosigner. |
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| Loan Amounts | Parent PLUS Loan Up to the cost of the student's education minus other financial aid. | Alternative Loan Minimum and maximum borrowing limits vary from lender to lender. It cannot exceed the Cost of Attendance minus other financial aid. |
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| Loan Cancellation | Parent PLUS Loan Loan forgiven if student or parent dies. | Alternative Loan Varies by lender. Some lenders waive the remaining balance in the event of the primary borrower's death or permanent and total disability. |
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| Cosigner Release Option | Parent PLUS Loan This loan does not require a cosigner. | Alternative Loan Many lenders provide a cosigner release option where the student can apply to release the cosigner after they graduate, make a specified number of on-time payments, and meet underwriting requirements. |
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| Loan Interest Accrual | Parent PLUS Loan Parents may postpone payments until student is out of school six months (must apply with servicer each year). Interest accrued during the postponed period is capitalized. Parents may also choose to make interest-only payments while student is in school. | Alternative Loan Interest accrues while student is in school. Some programs require that the student make minimum monthly payments or interest-only payments while in school. If deferred, repayment usually begins 6 months after student graduates or leaves school. |
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| Loan Deferment/Forbearance | Parent PLUS Loan Parent may defer payment on this loan until the student is out of school six months (must apply with servicer each year). To apply for this deferment, contact the U.S. Department of Education after the loan is disbursed. | Alternative Loan Varies from lender to lender. Check with the lender for availability. |
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| Loan Qualifying | Parent PLUS Loan Based on credit history; debt-to-income ratio is not considered thus making it easier to qualify. | Alternative Loan Varies from lender to lender but often debt-to-income ratio is considered in credit decision. Many lenders will require a credit-worthy co-signer. |
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| Loan Ease of Application | Parent PLUS Loan Parent must complete a Direct Parent PLUS Loan Master Promissory Note (Direct Parent PLUS MPN) when applying for their first Direct Parent PLUS Loan. Parent must also complete UW-Stout's Parent PLUS Loan Request Form. | Alternative Loan Online applications are available for most loans. Supporting documentation is generally required (proof of income, co-borrower addendum, etc.). |
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| Loan Fees | Parent PLUS Loan 4.228% origination fee. | Alternative Loan Fees vary from lender to lender. May include origination and/or repayment fees. |
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| Loan Repayment Terms | Parent PLUS Loan Repayment begins 45-60 days after loan is fully disbursed although the parent can request that the Department of Education delay repayment until after the student is out of school six months. Parent must apply for this deferment each year. 10 year repayment period. | Alternative Loan Varies among lenders. Typically, 10 - 25 years. |
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