Use the chart below to compare the features of each type of loan program. Once you have decided which program you want to use, click on the links provided at the top of the column to process the loan.
| FEATURE |
PLUS LOAN |
ALTERNATIVE LOANS |
SELF LOAN (MN Students only) |
|
Process My PLUS Loan |
Process My Alternative Loan |
Process My SELF Loan |
| Interest Rate |
Interest rate is fixed at 8.5% . Rates are issued each July 1. |
Variable, usually no cap. Many programs reset quarterly. |
Variable with no cap.
Adjusted quarterly |
| Current Interest Rate |
8.5% for loans certified/disbursed from July 1, 2007 to June 30, 2008. |
Varies from lender to lender based on credit history. Interest can range from 3%–18%. |
April 1, 2008: 6% |
| Borrower |
Parent |
Student
Cosigner, typically the parent, is required and bears equal responsibility for loan repayment. Loan will appear on cosigner's credit bureau report as well. |
Student
Cosigner, typically the parent, is required and bears equal responsibility for loan repayment. Loan will appear on cosigner's credit bureau report as well.
|
| Loan Amounts |
Up to total cost of student's education minus other financial aid. |
Minimum and maximum borrowing limits vary from lender to lender. |
Minimum Annual -- $500
Annual Limits
Undergrad: $7,500
Grad: $9,000
Maximum (Lifetime)
$55,500 |
| Cancellation |
Loan forgiven if student or parent dies. |
Not usually discharged if student dies. |
Loan forgiven if student dies. |
| Interest Accrual |
Parent may postpone payments up to 4 years - interest accrued during postponed period is capitalized. Parents may also choose to make interest-only payments while student is in school. |
Interest accrues while student is in school. Some programs require student to make minimum monthly payments or interest-only payments while in school. If deferred, repayment usually begins 6 months after student graduates or leaves school. |
Quarterly interest only payments are required and begin within 90 days of the first disbursement. |
| Deferment/Forebearance |
Deferment and forbearance options available. |
Varies from lender to lender. Check with lender for availability. |
Check with Minnesota Office of Higher Education. |
| Qualifying |
Based on credit history; debt-to-income is not considered thus making it easier to qualify. |
Varies from lender to lender but often debt-to-income ratio is considered in credit decision. |
Creditworthy co-signer required. Student must at least half-time in a degree seeking program. |
| Ease of Application |
Very easy. Parents can get pre-approved and/or
apply by fax, telephone, or on-line. |
Usually more difficult. Supporting documentation generally required (proof of income, co-borrower addendum, etc.) |
Very easy. Pre-approval can be done online and application sent to student's home address. |
| Fees |
Typically 3% origination fee. May be less depending on lender. |
Fees vary from lender to lender. May include origination and/or repayment fees. Fees can be as high as 16% or higher. |
None |
| Repayment Term |
10 years. |
Varies among lenders. Typically, 10 – 25 years. |
10 years |
| Consolidation |
Can be consolidated in a Federal Consolidation Loan. |
Cannot be added to a Federal Consolidation Loan. |
Cannot be added to a Federal Consolidation Loan. |
