University of Southern Indiana
 
Student Financial Assistance
Alternative Loans Versus Parent PLUS Loans

Federal Parent PLUS Loans Alternative Loans    
PLUS Loans are federally insured and are discharged in the event of total and
permanent disability or death		 Not federally insured and does not offer discharged in the event of disability or death
PLUS Loans offer a fixed rate with a
maximum of 9%		 Have variable interest rates that are reset quarterly and usually have a higher interest cap
Approval is not based upon financial need, only the borrower's credit standing Borrowers must meet minimum income and debt-to-income ration requirements as well as pass a comprehensive credit check
The PLUS Loan Master Promissory Note is good for ten years - no need to sign a new note every year! Must re-apply and sign a new promissory note each year
PLUS offers unemployment and economic hardship deferments No similar deferments for alternative loans
Income sensitive, graduated, and extended repayment options are available Generally, these deferments are not offered by private lenders
No loan limits (except the cost of education less other financial aid) Alternative Loans often have both annual and aggregate loan limits

Chart used by permission of The Student Loan Corporation, a subsidiary of Citibank

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