| Federal Direct PLUS Loan | Private Alternative Education Loan |
| Fixed interest rate. | Variable interest rate, changes monthly or quarterly. |
| Interest rate is fixed at 7.9%. | Interest rate may range from the prime rate to as high as 21.0%. |
| Lender may offer delayed payment options for up to four years. | Payments may be deferred while the student is enrolled at least half-time. |
| Parent may borrow up to the total cost of attendance less other aid. | Student may borrow up to the total cost of attendance less other aid. |
| Credit check based on federal standards, no debt-to-income ratios or credit-scoring. A parent may have a better chance of being approved as a borrower on a PLUS Loan than as a co-signer on an alternative loan. | Borrowers must pass a comprehensive credit review process including credit scoring and proof on income requirements. |
| Parent is responsible for repayment. | Student is responsible for repayment. A co-signer is equally liable and the loan appears on their credit report. Parent can help build the credit rating of the student. |
| Accrued interest capitalizes once at final repayment. | Accrued interest may be capitalized monthly, quarterly, or once at repayment. |
| Federally insured against death and disability for both the parent and the student. | No insurance against death and disability. |
Opportunities available to consolidate PLUS Loans. | Consolidation options becoming more available. |
