Loan Options

Loans for parents are federal loans. They are provided under the Federal Family Education Loan Program (FFELP). FFELP loans come from the government, and can be either subsidized (needs-based) or unsubsidized.

A federal loan allows graduate/professional students and parents who pass a credit check to borrow extra money for a student or dependent’s education. It’s designed to supplement other sources of funds, and can be a great deal because they:

• Have a fixed interest rate of 8.5 percent
• Require minimal credit qualifications
• Are not based on financial metrics such as income

An Alternative loan allows undergraduate or graduate students who pass who pass a credit check (or cosigner pass a credit check) to borrower extra money in addition to funds from federal awards. Alternative loans come from places like banks, insurance companies, foundations, etc. Typically, interest rates and fees will be higher than for a PLUS loan.

Here are a few things to keep in mind regarding alternative loans:

• They are offered by numerous providers, so shop around.
• Loan terms vary, so check the details. Typically, repayment starts on disbursement.
• Most are based on financial metric such as credit and income, so get your financial affairs in order.

BrainScratch offers an alternative loan, BrainBucks, available for the student to borrow.

These loans can come from either federal or alternative sources. They allow you to:

• Combine multiple eligible loans into a single payment.
• Improve the terms of a single student loan.
• Stretch out repayment schedules for existing loans.