Student Financial Aid
PLUS Loan / Alternative Loan Comparison
It is important to note the differences between the Federal Direct Parent PLUS Loan and an alternative loan through a private lender. Differences in eligibility, interest rates, and repayment schedules exist between the Parent PLUS and alternative loans.
| PLUS | vs | ALTERNATIVE LOAN | |
| Borrower is the Parent | Borrower is the student. Student should have a co-signer to secure the loan at the best possible rate. | ||
| Parent must pass a credit check. Cannot have an adverse credit report or be in default. | Student will need to be credit worthy to borrow without a co-signer. Most lenders require a co-signer for first and second year students. | ||
| Repayment is 60 days after the final disbursement of the academic year or may be deferred until 6 months after the student graduates or ceases enrollment. | Repayment options vary from lender to lender. | ||
| Interest is 7.9% fixed for the life of the loan (08/09) | Interest can be fixed or variable (based on prime (+/- %)). Varies from lender to lender. | ||
| Capped at 9% - Interest cannot go any higher. | No cap on interest. | ||
| Student must be registered for at least 6 hours and making satisfactory academic progress. | Some lenders allow students to be enrolled less than 6 hours and be USAP (unsatisfactory academic progress). | ||
| FAFSA must be on file. | A FAFSA is not required, but is recommended, to take advantage of the federal loan programs. | ||
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