The Parent Direct PLUS loan program is managed by the federal government. When you use this type of loan, you are gaining access to funds through the US Department of Education, so they will act as your lender.
– parent of a dependent undergraduate student who is enrolled at an eligible school at least half time– suitable credit– meet the general eligibility requirements for federal student aid
Your student needs to contact their chosen school’s financial aid office to determine what Parent Direct PLUS Loan application is required. If eligible, you’ll need to sign a Direct PLUS Loan Master Promissory Note.
Private student loans are financial products offered by traditional lenders, such as banks and credit unions, and are not backed by the federal government in any way.
Along with your child being enrolled, the borrower needs to have suitable credit scores, and the minimums may be more stringent. Lenders will want proof of steady income, which is why many parents have to act as cosigners
Some lenders aren’t fully approving student loan applications until after June 1 as they want to pull credit checks closer to the actual first disbursement date. If approved, you’ll need to sign loan documents stating that you understand the terms.