Paying for college often becomes a shared responsibility between students and parents. When federal aid and scholarships aren’t enough, families typically face two common options: taking out a parent loan or cosigning a private student loan.  

While both can help bridge the funding gap for your student, they work very differently and choosing the right path depends on your goals and circumstances.  

Here’s a clear, side-by-side look to help you decide which option may be better for your family. 

What Is a Parent Loan? 

A parent loan (most commonly a federal Parent PLUS loan or a private parent loan) is taken out entirely in the parent’s name. This means the parent is the primary borrower and is fully responsible for repayment from day one. 

Parent loans can typically cover up to the full cost of attendance (minus other financial aid), making them a flexible option for families facing large funding gaps.  

Key characteristics of a parent loan: 

• The parent owns the debt  

• Repayment responsibility stays with the parent unless refinanced  

• Federal options may include protections like income-driven repayment or forgiveness programs  

This option gives parents full control, but also full responsibility. 

What is a Cosigned Student Loan? 

Cosigning a private student loan means the student is the primary borrower, but the parent agrees to share legal responsibility for the loan. 

This is extremely common. In fact, most undergraduate private student loans require a cosigner because students typically don’t have enough credit history or income to qualify on their own. In fact, Ascent borrowers with a cosigner see rates that are 4.92% lower on average* and are 4x more likely to be approved.* 

Key characteristics of a cosigned student loan:  

• The student owns the loan, but the parent is equally responsible  

• Both borrower and cosigner are accountable for repayment  

• The loan appears on both credit reports  

• Cosigning can help students qualify and potentially secure better rates, but it comes with shared risk. 

When you consider this option, it’s important to note that some lenders may offer a cosigner release feature. A cosigner release removes the cosigner from the loan after the student meets the lender’s requirements, so the student becomes solely responsible for repayment after becoming eligible according to the lender’s requirements.  

The Biggest Difference: Who Is Responsible? 

At the core, the decision comes down to ownership and control. 

• With a parent loan, the parent is 100% responsible for repayment.  

• With a cosigned loan, responsibility is shared, but if the student can’t pay, the parent must step in.  

In both cases, parents (or the cosigners) are financially on the hook. The difference is whether that responsibility is primary (parent loan) or conditional (cosigning). 

Is the Cosigned Student Loan or Parent Loan Better for Me? 

There isn’t a one-size-fits-all answer when it comes to choosing between a parent loan and a cosigned private student loan. The right option depends on your family’s goals, resources, and comfort levels with shared responsibility. 

Here are some questions to ask as you consider your decision: 

• Who will realistically handle monthly payments, both during school and after graduation?  

• How important is it to keep control of the loan in one person’s hands?  

• Are you comfortable sharing financial responsibility, or do you prefer a single primary borrower?  

• Would having the option to release a cosigner in the future make a difference for your long-term plan?  

Talking through these questions can help your family choose a path that works best, keeps everyone clear on expectations, and sets up both the student and parent for financial confidence in the years ahead. 

Final Thoughts 

The right choice comes down to your family’s financial priorities, communication, and long-term plan. When you take the time to align on expectations and understand the tradeoffs, you can move forward with confidence and build a plan that supports both education goals and financial well-being. 

* 4x higher acceptance rates were observed between November 2024 through January 2025 across all products when a loan application is cosigned vs without a cosigner. Ascent’s minimum credit requirements vary based on loan product, credit history, and whether you’re applying with a cosigner. You can see your rates without impacting your credit score to help you determine which product could be best for you based on your unique circumstances.