Comparison of Undergraduate Financing

Click on each of the financing options below to find the advantages and disadvantages of each and information on how to apply.

Tuition Payment Plans

Advantages:

  • Usually offered by colleges and private agencies
  • College-sponsored plans usually have low or no fees
  • Beneficial for financing small balances, managing cash flow, or using in combination with other financing options
  • Possibly no interest charges

Disadvantages:

  • Private agency fees or high interest
  • Repayment period usually limited to college term or year, so installment payments can be high
  • No loan forgiveness in the event of death or total disability unless borrower purchases that option

More details and links to apply.

Federal PLUS Loans versus Private/Alternative Loans

 Federal PLUS LoanAlternative Loans
Borrower Parent of a dependent undergraduate student. Student is the borrower with a co-signer.
Credit Review Minimal credit review, based on federal standards and credit history. Approval is not based on income, financial need or debt to income ratio. Comprehensive credit review process required. Credit scoring and/or debt to income ratio may be reviewed.
Repayment Parent is responsible for repayment. Student is responsible for repayment. A co-signer is also equally liable. The loan and payment history are listed on the co-signer's credit report as well as the student's.
Interest Rate 8.05% effective July 1, 2023. Variable; can change monthly or quarterly. Usually no cap.
Capitalization of Interest Once at repayment. Can be as often as monthly.
Fees 4.228%, deducted proportionately from each disbursement. Varies by lender.
Discharge PLUS loans are federally insured and are discharged in the event of disability or death. Alternative loans are not federally insured and may not offer discharge in the event of disability or death.
Payment Options Loans disbursed after July 1, 2008: Payments may be deferred until 6 months after student ceases to be enrolled at least half time. Payments may be deferred while a student is enrolled at least half time.
Deferment and/or Forbearance Unemployment and hardship deferments are available. Unemployment and hardship deferments are generally not available.
Consolidation Can be consolidated in a federal Consolidation Loan. Limited consolidation options available at a variable rate.
How to Apply www.studentaid.gov
Note: Student FAFSA required
Sign in using parent federal FSA ID #.
Select "Complete PLUS Request Process"		 For applications and instructions visit: go.naz.edu/privateloan