Parent PLUS Loan vs. SoFi Parent Loan

Why consider the private SoFi Parent Loan in lieu of the federal Parent PLUS loan? Creditworthy parents may find the SoFi Parent Loan is a better option.

What is the Federal Parent PLUS Loan?

  • A government program that allows parents to borrow on behalf of dependent undergraduate students up to the cost-of-attendance minus other financial aid received
  • The U.S. Department of Education is the lender
  • Term is 10-years and the interest rate is tied to the 10-Year U.S. Treasury notes. Current rate is 6.84% with a 4.292% origination fee; everyone gets the same rate regardless of credit history
  • Detailed up-to-date information is available here

What is the SoFi Parent Loan?

  • A private loan option for parents to borrow on behalf of dependent undergraduate or graduate students up to the cost-of-attendance minus other financial aid received
  • SoFi Lending Corp. is the lender
  • Term is 5 or 10-years and tied to the monthly LIBOR. Current rates range from 3.690% APR to 7.115% APR (with AutoPay) variable rates with 0.000% origination fee; rates depend on creditworthiness and other factors
  • Detailed up-to-date information is available here

SoFi Parent Loan Federal Parent PLUS Loan
Fixed Rate 4.250% APR to 8.000% APR (with Autopay) 6.84% (rate excludes origination fees)
Variable Rate 3.690% to 7.115% APR (with Autopay)
Rates capped at 9.95% APR
Not available
Origination Fee 0.00% 4.292%
Prepayment Penalties None None
Term Options Standard 5 Year or Standard 10 Year Graduated or Extended
(up-to-date plans here)
Amount Up to cost of attendance
(less other financial assistance)
Up to cost of attendance
(less other financial assistance)
Certification Self Certification School Certification
In-School Deferment Not available, immediate repayment Optional through servicer,
interest accrues
Career Strategy Yes No

What does a Federal Parent PLUS loan cost? In many cases, the interest calculation omits origination fees and understates the true cost to you. For example, if you take out $40k with no origination fee and 6.84% interest rate, your lifetime interest is $15,337.17. But if you include a 4.292% origination fee, your lifetime interest is $17,818.74—thousands more.

Depending on your circumstances, the Federal Parent PLUS Loan may be the best option. However, the SoFi Parent Loan may provide a lower monthly payment, higher lifetime savings, or possibly both. We recommend consulting the FinAid calculator to understand your repayment circumstances under various scenarios.

The Federal Parent PLUS Loan may be discharged under certain circumstances including death or permanent disability. The SoFi Parent Loan provides access to career strategy for both the parent and the child upon graduation.

Questions? Call us 7 days a week at 855-456-7634

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