Online Student Loans Guide

New Private Student Loan: The Wells Fargo Student Loan for Parents

May 21st, 2010

Wells Fargo & Company launched the new Wells Fargo Student Loan For Parents earlier this month. This loan provides families another affordable financing option to help pay the cost of student tuition. Parents and sponsors who take out this loan have the option to make interest-only payments for up to 4 years while the student is in school and can take up to 15 years to repay the loan.

A principal advantage of the Wells Fargo Student Loan For Parents is that, unlike the Federal PLUS Loan, it allows any qualified sponsor to receive funds on behalf of any qualified student. Only the parents of a dependent student are elligible to apply for a Federal PLUS Loan. Students who have not completed the Free Application for Federal Student Aid (FAFSA) are elligible to receive the Wells Fargo Student Loan For Parents, as are students who are enrolled less than half-time (as opposed to the Federal PLUS Loan, which is only available for students who are enrolled at least half-time).

The Wells Fargo Student Loan for Parents can be used in addition to a Federal Stafford Loan. Up to $25,000 may be borrowed per school year, and the aggregate loan limit is $100,000 (including all of the borrower’s other educational debt). The interest rate on the Wells Fargo Student Loan for Parents is variable (based on credit). The loan comes with no application, origination, or repayment fees and funds are sent directly to the parent or sponsor accepting the loan. Another benefit of this loan is that applicants have the option of obtaining a 0.25% interest rate reduction if they set up an automatic payment from a personal checking or savings account.

The Wells Fargo Student Loan for Parents allows parents or sponsors to be solely responsible for the loan. However, it also allows students to apply for the loan with the sponsor or parents as a cosigner. In this case the student is the the primary borrower, but the cosigner will be fully responsible for repaying the loan if the student does not fulfill his or her obligations.

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