If you’re a parent of a dependent undergraduate student and want to help pay for their college education, you have options — including a Parent PLUS Loan from the U.S. Department of Education.

These loans offer more flexible payment plans than many private student loan options, but also have some key drawbacks. For example, they can be more expensive over time. And you — not your child — will be responsible for repaying your Parent PLUS Loan.

You should always exhaust federal student loan options before turning to a private student loan. If you decide a private student loan is right for you, it pays to shop for the best offer available to you. Credible lets you compare private student loan rates from multiple lenders, all in one place.

The federal government limits how much students can borrow in government loans. So, parents may take out a federal Parent PLUS Loan to help pay for their child’s education costs. 

Parent PLUS Loans are a type of Direct PLUS loan made to the parent of a dependent undergraduate student. They’re not available to students and can’t be transferred. 

Parent PLUS Loans have fixed interest rates, but they typically come with an origination fee. 

The maximum Parent PLUS Loan amount you can borrow is the school’s cost of attendance minus any other financial aid your child receives. 

Because these loans aren’t subsidized, interest begins to accrue as soon as the funds are disbursed, and the borrower is responsible for paying all the interest. If you defer the loan, you don’t have to make payments while your child is in school at least half-time or for six months after your child graduates, drops below half-time enrollment, or leaves school. But interest will still accrue during the deferment period. 

The IRS student loan interest deduction allows you to deduct up to $2,500 each year from your taxable income as a Parent PLUS borrower. However, the actual amount you can deduct is based on the interest you paid during the previous tax year, your tax filing status, your income, and other factors. 

If you have any questions about student loan tax deductions, consult a tax professional.

Both Parent PLUS Loans and private parent loans can help you pay for your dependent student’s college education. The federal government makes Parent PLUS Loans, while banks, credit unions, and other financial organizations offer private parent loans either online or in-person. 

To receive a Parent PLUS Loan, you must be the parent (in some cases, you can be the step-parent) of a dependent undergrad who is enrolled in college at least half-time. You must have a good credit history and meet other general eligibility requirements. You can apply on the Federal Student Aid website, and you’ll undergo a credit check. 

Private parent loans are private student loans that you can take out to fund your child’s education. You typically need good to excellent credit to qualify for the lowest interest rates. 

If your credit is poor, you may elect to use a cosigner. Many federal loan programs do not require a credit check or cosigner. But they do conduct a credit check on all Direct PLUS Loan applicants. To receive a Parent PLUS Loan with poor credit, you may choose to obtain an endorser with good credit or provide documents describing the extenuating circumstances relating to your adverse credit history. 

Most private lenders also conduct a credit check, so applying with a cosigner may help you obtain a loan with better rates than if you tried to apply on your own. Just remember, if you are unable or unwilling to make your loan payments, your cosigner will be responsible for all missed payments or even the total balance on the loan. 

To get the best rates and terms on a private student loan, you’ll need good to excellent credit. If you’re a student without a credit history or your credit is shaky, you may want to consider adding a parent as a cosigner. 

If you need to take out private student loans, visit Credible to compare private student loan rates from various lenders in minutes.

If you decide a Parent PLUS Loan is right for your family, you can apply online at StudentAid.gov. Here are the basic steps:

Keep in mind, PLUS loans require a credit check. If you have adverse credit history, you may still be able to get a Parent PLUS Loan, but there will be extra steps involved.

It’s always a good idea to shop around for the best private student loan lenders to find one that offers the best rates and terms for you. When you’ve narrowed your search, follow these steps to apply for private loans:

With Credible, you can compare private student loan rates without affecting your credit.