Student Loans for Parents With Bad Credit

If you have bad credit (a FICO score of 579 or below), getting a parent student loan can be tough. Many lenders either deny applicants with poor credit or don’t allow cosigners to help them qualify. Federal Parent PLUS loans come with a credit check and could require an endorser (similar to a cosigner) if you have an “adverse credit history.”

Similarly, some lenders allow parents to apply with a cosigner on a private parent student loan. If the cosigner has good credit, you may qualify and even secure a lower rate. Some lenders also offer cosigner release, so you might be able to take full ownership of the loan in the future.

We contacted several private lenders that offer parent student loans to find out whether they allow cosigners. The following four confirmed that they do:

Table of Contents

1. Federal student loans for parents with bad credit
2. Private parent student loans with cosigner options
   1. SoFi
   2. ELFI
   3. ISL Education Lending
   4. Nelnet Bank
3. Why cosigner release matters
4. Other options for families

Federal student loans for parents with bad credit

If your child hasn’t maxed out federal student loans in their own name, that’s the best place to start. Federal Direct Subsidized and Unsubsidized Loans don’t require a credit check, and they offer fixed rates and flexible repayment options.

As a parent, you can also apply for a federal Parent PLUS loan. These loans don’t have a required credit score, but you can’t have an adverse credit history. That includes default, bankruptcy, foreclosure, or certain delinquent debts in the past five years. If denied, you can:

• Add an endorser (similar to a cosigner)
• Request reconsideration due to extenuating circumstances

PLUS Loans don’t offer endorser release. And even if approved, they carry relatively high interest rates: 9.08% for the 2025 – 2026 school year, along with a hefty 4.228% origination fee.

Parents with bad credit risk being denied a parent loan. If they’re approved, the interest rate will likely be high.
I recommend improving your financial condition and credit profile before applying for a loan. If you’re unsure about how to do this, engage with a financial or debt counselor or other financial professional who has experience navigating these financial obstacles.

Private parent student loans with cosigner options

If federal loans won’t cover everything, some private lenders may help. But only a few will allow you to apply for a parent student loan with a cosigner if your credit is poor.

SoFi

Best for Member Benefits

4.7 _/5

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About SoFi’s parent student loans

• Credit score requirements: 679+
• A representative told us SoFi accepts cosigners on parent loans
• Apply for cosigner release after 24 consecutive, on-time monthly payments

With a SoFi parent loans, you won’t pay origination or late fees. Plus, you can take advantage of exclusive members-only benefits, including financial planning and rate discounts if you take out another SoFi loan.

SoFi doesn’t allow deferred payments on its parent loans, so be prepared for immediate interest-only repayment while your child is in school. 

Variable rates (APR)	5.82% – 16.85%
Fixed rates (APR)	6.07% – 15.86%
Loan amounts	$1,000 – 100% of certified costs
Repayment terms	5, 7, 10, or 15 years

ELFI

Best for Personalized Support

4.5 _/5

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About ELFI’s parent student loans

• Credit score requirements: 680+
• A representative told us ELFI accepts cosigners on parent loans
• No traditional cosigner release, but refinancing in your own name is possible later

ELFI is known for its standout customer service. Every borrower is matched with a personal loan advisor who provides one-on-one support from application to final payment.

ELFI doesn’t offer in-school deferment for parent loans, but its low interest rates and lack of fees make it competitive.

Variable rates (APR)	5.00% – 14.22%
Fixed rates (APR)	5.00% – 14.22%
Loan amounts	$1,000 – 100% of certified costs
Repayment terms	5, 7, 10, or 15 years

ISL Education Lending

3.7 _/5

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About ISL’s parent student loans

• Credit score requirements: 660+
• Website clearly states that its College Family Loan allows cosigners
• Apply for cosigner release after 24 consecutive, on-time monthly payments

ISL Education Lending is an Iowa-based nonprofit that provides student and parent loans nationwide. The College Family Loan is available with low, fixed rates, and you can opt to defer repayment while your child is in school if you prefer to.

Fixed rates (APR)	3.54% – 8.75%
Loan amounts	Up to your school-certified cost of attendance
Repayment terms	10 or 15 years

Nelnet Bank

3.6 _/5

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About Nelnet’s parent student loans

• Credit score requirements: Mid-600s+
• Website clearly states that its Parent Loans allow cosigners
• Apply for cosigner release after 24 consecutive, on-time monthly payments

Nelnet Bank offers private parent student loans if your student is enrolled at least half-time and the parent (or a cosigner) meets the other eligibility requirements. You won’t pay an origination fee (like you will with federal Parent PLUS loans), and the rates are competitive compared to Parent PLUS loans.

Variable rates (APR)	5.97% – 8.77%
Fixed rates (APR)	3.54% – 8.75%
Loan amounts	Up to your school-certified cost of attendance
Repayment terms	10 or 15 years

These lenders may be a strong fit for parents with bad credit who have a creditworthy family member willing to cosign.

Why cosigner release matters

If your cosigner helps you qualify, you might not want them tied to the loan forever. (They also might not want this, especially if they plan to apply to finance a large purchase in the future and want to ensure their debt-to-income ratio is as low as possible.)

With cosigner release, the lender removes your cosigner from the loan after you meet certain criteria, like making 12 to 36 months of on-time payments. Not every lender offers this feature, so it’s important to choose carefully if your goal is to eventually take full responsibility for the loan.

Other options for families

If you can’t qualify for a parent loan or don’t want to risk your credit, your child may be able to borrow on their own. Some lenders offer private student loans directly to students with no cosigner. Examples include:

• Funding U: Approves based on academic performance.
• MPOWER: Designed for international and DACA students.
• Edly: Income-based repayment model.

Remember: It’s OK for students to take on education loans. In the future, when you’re in a better financial condition, you can assist with paying off the loan or becoming a cosigner in an effort to obtain better terms.

You can also help your child reduce college costs by:

• Choosing an affordable school or starting at a community college
• Encouraging them to apply for scholarships and grants
• Supporting them with housing, meals, or transportation while they study

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Bad credit doesn’t automatically mean you can’t help your child pay for college. But it may limit your borrowing options, especially if you can’t add a cosigner.

The four lenders we featured confirmed they allow cosigners on parent student loans, making them some of the few viable options for credit-challenged parents. If you qualify and can add a cosigner, you might access lower rates—and potentially remove your cosigner later through release or refinancing.

As always, compare rates, terms, and eligibility rules before applying, and make sure any borrowing fits into your financial plan.

Recap of private student loans for parents with bad credit