Compare PLUS and Alternative Loans

Research your options

Borrow only what you need! Remember that excessive debt can have a negative effect on your future plans and lifestyle for years to come.

• Compare Federal and Private Loans
• Learn more about Direct PLUS loans
• Calculate what you need to borrow: interactive worksheet
• Information about the SPU payment plan as an alternative to borrowing

Important facts about Direct PLUS and Alternative Loans

Interest rate

• Alternative (private) Loans
  
  • Interest rate may be fixed or variable; variable rates may go up or down depending on the marketplace.
  • Your interest rate is dependent on your credit history. The lower your credit score, the higher your interest rate. If you have poor credit, you may need a creditworthy co-signer.
• Direct PLUS Loans
  
  • 6.28% fixed (effective for loan disbursements on or after 07/01/2021 through 07/01/2022).
  • PLUS loans require a credit check for adverse credit history. Denied borrowers may appeal or obtain an endorser (co-signer) to qualify.

Origination fees

• Alternative (private) Loans
  
  • Check with your lender.
• Direct PLUS Loans
  
  • 4.228% (effective for loans disbursing on or after 10/01/20 and before 10/1/22).

Counseling requirement

• Alternative (private) Loans
  
  • Check with your lender.
• Direct PLUS Loans
  
  • PLUS borrowers denied but subsequently approved through an appeal or obtaining an endorser must complete PLUS entrance counseling.

Repayment options while student is in school

• Alternative (private) Loans
  
  • Deferring repayment options are determined by the lender. You may be able to make interest only payments, or postpone payment until you are no longer enrolled. You will also want to ask if the lender provides a grace period prior to entering repayment.
• Direct PLUS Loans
  
  • Repayment begins 60 days after the loan is fully disbursed. There is no grace period.
  • Parent PLUS borrowers may defer repayment while the dependent student is enrolled at least half-time and for an additional six months after the student ceases to be enrolled at least half-time.
  • Graduate PLUS borrowers enrolled at least half-time are eligible for in-school deferment and a six month grace period prior to repayment.

Responsibility to pay

• Alternative (private) Loans
  
  • Deferring repayment options are determined by the lender. You may be able to make interest-only payments, or postpone payment until you are no longer enrolled. You will also want to ask if the lender provides a grace period prior to entering repayment.
• Direct PLUS Loans
  
  • Repayment begins 60 days after the loan is fully disbursed. There is no grace period.
  • Parent PLUS borrowers may defer repayment while the dependent student is enrolled at least half-time and for an additional six months after the student ceases to be enrolled at least half-time.
  • Graduate PLUS borrowers enrolled at least half-time are eligible for in-school deferment and a six month grace period prior to repayment.

Co-signer

• Alternative (private) Loans
  
  • A creditworthy co-signer may help a student qualify for the loan and potentially get a lower interest rate. Co-signers are responsible for the loan if the student doesn’t make payments as scheduled. Review the lender criteria if a co-signer release option is provided.
• Direct PLUS Loans
  
  • A denied PLUS borrower may pursue an endorser (co-signer) to qualify. The endorser must be approved with a credit check for adverse credit history. There is no endorser (co-signer) release option. PLUS loans approved with an endorser are limited to the amount stipulated by the endorser and limit the PLUS MPN to a single year note.

Enrollment status eligibility

• Alternative (private) Loans
  
  • Check with lender for enrollment status eligibility.
• Direct PLUS Loans
  
  • Half-time or greater.

Standard repayment

• Alternative (private) Loans
  
  • Varies with the lender.
• Direct PLUS Loans
  
  • 10 years.

Options during repayment

• Alternative (private) Loans
  
  • Check with lender for options to postpone or reduce payments.
• Direct PLUS Loans
  
  • Multiple repayment plans are available.
  • Deferment and forbearance options to postpone payments are available.

Eligibility for federal consolidation loan

• Alternative (private) Loans
  
  • No
• Direct PLUS Loans
  
  • Yes

Cancellation due to death or disability

• Alternative (private) Loans
  
  • Check with lender regarding cancellation provisions.
• Direct PLUS Loans
  
  • Yes. The information is available here.

Loan servicer information

• Alternative (private) Loans
  
  • Check with lender for loan servicer information.
• Direct PLUS Loans
  
  • Loan Servicer information provided at studentaid.gov.