What is the difference between a PLUS parent loan and a private/alternative loan?
A PLUS loan has a fixed rate, they are easier to qualify for and if a parent is denied for a PLUS loan, the student will automatically be eligible for an additional Unsubsidized Stafford loan amount. PLUS loans can be consolidated and the parent has the option of deferring repayment for up to 48 months while student is still enrolled at least half-time. PLUS loans also provide some tax savings and incentives. Private/alternative loans have a variable interest rate with no cap, loans are in the students name which often requires a co-borrower who will also be responsible for any outstanding debt. Consolidation and deferment are at the discretion of the lender and there are no tax benefits.
