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Comparing the Brazos Parent Loan
with the Direct Parent PLUS Loan





BEFORE YOU CONTINUE READING: The information in this Comparison is valid only under normal circumstances. There are special benefits being applied on Federal Direct Plus Loans during these trying times, which are not permanent but are being applied for an indefinite period of time. As well, there are proposals for federal student loan forgiveness that have a likelihood of passing that are not reflected in this Comparison. Please click here to review information on these special programs and take them into consideration when comparing the Brazos Parent Loan with the Federal Direct Parent Plus Loan.



Many Texas parents use Direct Parent Plus Loans to pay for their dependent’s undergraduate education. The Direct Parent PLUS Loan is a “one size fits all program” where all borrowers, regardless of creditworthiness, receive the same interest rate and pay the same origination fee. This academic year, the Direct Parent Plus Loan has an interest rate of %, which includes a 0.25% ACH discount, and an origination fee of %.


The Brazos Parent Loan provides responsible Texans an alternative to the Direct Parent Plus Loan. With no fees and a low interest rate, the Brazos Parent Loan provides an affordable way for parents, family members or friends to help pay for a benefiting student’s undergraduate or graduate education. With our loan, your benefiting student can focus on their grades rather than student loan debt.


Compare the Brazos Parent Loan and Direct Parent PLUS Loan.


Brazos Parent Loan Federal Direct Parent Plus Loan
Lender Brazos Education Lending Corporation United States Department of Education
Borrower Any parent, grandparent, spouse, other family member, or friend of the student Biological or adoptive parent of the student (in some cases step-parents)
Interest Rate Variable rates from % APR to % APR.1 Fixed rates from % APR to % APR.1 Rates include the 0.25% Auto-Pay Discount. Rates are based on credit history and loan term selected. For the 2021-2022 school year, %, regardless of borrower credit history. Rate includes a 0.25% discount for automatic payments.
Origination/Disbursement Fees Zero fees Yes, the federal government charges Direct Parent PLUS borrowers an origination fee of % of the amount borrowed. The fee is deducted from the proceeds of the loan
How much may I borrow each school period? You may borrow up to Cost of Attendance, less other financial aid, as certified by the school. You may borrow up to Cost of Attendance, less other financial aid, as certified by the school.
What repayment terms are available? 5, 7, 10, 15 and 20-year terms are available.2 10 years is standard, but can be extended up to 25 years if you have more than $30,000 in outstanding loans.
What repayment plans are available? Immediate repayment. Standard Repayment Plan
Graduated Repayment Plan
Extended Repayment Plan
For more information about these plans, visit studentaid.gov.
Are there any prepayment penalties? No. No.
Are there any interest rate reductions? Yes, a 0.25% Auto-Pay interest rate reduction is available for borrowers who sign up for automatic payments from a bank account.1 Yes, a 0.25% interest rate reduction is available for borrowers who sign up for automatic payments from a bank account.
Qualifying credit criteria Must have a FICO score of at least 720 (or 690 if applying with a cosigner), have a strong credit history and meet other credit requirements. No adverse credit history
When does repayment begin? Immediate repayment after the final disbursement on the loan is made. Immediate repayment after the final disbursement on the loan is made.
Is in-school deferment available on a parent loan? No. Repayment begins immediately after the loan is fully disbursed. Yes. Interest will still accrue during the in-school period and for 6 months post-graduation. Interest accrued during this time which is not paid is capitalized and added to the principal balance of the loan.
Is there a cumulative borrowing limit? You may borrow up to Cost of Attendance, less other financial aid, as certified by the school. You may borrow up to Cost of Attendance, less other financial aid, as certified by the school.
Eligible Degrees Available for undergraduate, graduate, medical, law and other professional degree students Limited to undergraduate students
Can a parent loan be transferred to a child? No No
Is a school certification required? Yes Yes
What interest rate types are available? Fixed and variable rate loans are available. Fixed rate loans only.
Is my interest deductible for tax purposes? Yes, your interest paid is deductible, subject to certain limitations. Please consult your financial advisor for deductibility in your particular situation. Yes, your interest paid is deductible, subject to certain limitations. Please consult your financial advisor for deductibility in your particular situation.
Is a portion of my interest subsidized? No. No. Unlike undergraduate Direct Loans, Parent Plus loan interest is not subsidized.
When does interest capitalize? Once upon entering repayment, and subsequently upon entering repayment after any period of deferment or forbearance. Once upon entering repayment, and subsequently upon entering repayment after any period of deferment or forbearance.
Can I pay interest on the loan before the loan is fully disbursed? Yes, you may pay interest on the loan prior to full disbursement. Yes, you may pay interest on the loan prior to full disbursement.
Is forbearance available? Yes, up to one year of forbearance is available in three-month increments. Interest will continue to accrue and will be added to the balance of the loan once the loan re-enters repayment. Yes, forbearance is unlimited but your servicer may set a limit on the maximum period of time. Interest will continue to accrue and will be added to the balance of the loan once the loan re-enters repayment.
Is loan forgiveness available? Yes, upon the death of a borrower or cosigner, the loan will be forgiven only as to the deceased party. Yes, upon the death of the borrower or the student for whom the loan was taken and upon permanent disability of the borrower. There are other special loan forgiveness programs that may be available to you. Please see studentaid.ed.gov for a complete list.

Please be sure to check out https://studentaid.ed.gov/sa/ for current information on all federal student loan programs.





Parent Loan Fixed rates from


% APR


Including 0.25% Auto-Pay Discount 1


See our rates



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Disclaimers


1. Brazos Parent Loan fixed rates from % APR to % APR (with Auto-Pay Discount). Variable rates from % APR to % APR (with Auto-Pay Discount). Interest rates on Brazos loans are capped at 9.90%. Lowest variable rate of % APR assumes current 1 month LIBOR rate of % plus a % margin minus the 0.25% Auto-Pay Discount. Not all borrowers receive the lowest rate. If approved for a Brazos Parent Loan, the fixed or variable interest rate offered will depend on your creditworthiness, the term of the loan and other factors, and will be within the ranges of rates listed above. For the variable rate Brazos Parent loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases.

Auto-Pay Discount. The interest rate in effect will be reduced by 0.25% if either the borrower or the cosigner authorizes automated (ACH) payments from any bank account. This ACH interest rate reduction, referred to as the Auto-Pay Discount, applies only when full principal and interest payments are automatically drafted from a bank account. This interest rate reduction will not continue to apply during periods of approved forbearance or deferment. The Auto-Pay Discount will terminate if the automatic bank account payments discontinue or there are any three instances of insufficient funds at any time during the term of the loan. A borrower may requalify upon reauthorization of automatic payments from a valid bank account.


2. The tables below contain the estimated monthly payments, estimated total interest, and estimated total cost of a $10,000 loan at the median fixed and variable rates for each of the terms we offer.

Fixed Rates

Term Median APR Number of Payments Estimated Monthly Payment Estimated Total Interest Estimated Total Cost
5 Year

%
60 $

$

$

7 Year

%
84 $

$

$

10 Year

%
120 $

$

$

15 Year

%
180 $

$

$

20 Year

%
240 $

$

$


Variable Rates

(Variable APRs and amounts subject to increase or decrease. Variable rates are indexed to the one-month LIBOR rate and assume a one-month LIBOR rate of %.)


Term Median APR Number of Payments Estimated Monthly Payment Estimated Total Interest Estimated Total Cost
5 Year

%
60 $

$

$

7 Year

%
84 $

$

$

10 Year

%
120 $

$

$

15 Year

%
180 $

$

$

20 Year

%
240 $

$

$