Click on each of the financing options below to find the advantages and disadvantages of each and information on how to apply.
| Federal PLUS Loan | Alternative 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 |