The chart below will compare the major aspects of

							  The chart below will compare the major aspects of the Federal PLUS Loan and the private
                                 alternative loan programs.
                                 Federal PLUS Loan                                     Private Alternative Loans
Borrower           Parent                                                   Student (co-signer typically needed)
Fees               Usually 3% origination fee                               Vary from lender to lender
Interest Accrual   Interest accrues from the time of disbursement; Parent   Interest accrues from the time of disbursement, but
                   may request interest only payments or to defer           usually no payment is required while the student is in
                   payments while the student is in school                  school
Interest Rate      Capped at 9%; Fixed at 8.5% as of July 1st, 2006.        Variable; set by lender, usually on a quarterly basis;
                                                                            typically based upon credit rating of borrower and/or
                                                                            cosigner
Repayment          Begins 30-60 days after second disbursement; 10 year     Varies from lender to lender; typically begins 6
                   repayment term                                           months after graduates or leaves school; usually 10-
                                                                            25 year repayment term
Early Repayment    No penalty for making extra payments or paying the       No penalty for making extra payments or paying the
                   loan off early                                           loan off early