You don’t need to be a parent to get this parent loan for Lone Star State residents.
Brazos parent loans could be what you’re looking for. Rates can start as low as 4.15% and you don’t need to be related to the student to qualify. The catch: It’s only available in Texas and you need excellent credit.
| Product Name | Brazos Parent Loan |
|---|---|
| Min Loan Amount | $1,000 |
| APR | 4.15%–6.74% (with autopay) |
| Interest Rate Type | Fixed |
| Minimum Loan Term | 5 years |
| Maximum Loan Term | 20 years |
| Requirements | Live in Texas, have a credit score of 720, or 690 if you’re applying with a cosigner, make at least $60,000, or $30,000 if you’re applying with a cosigner, have a strong credit history. |
- Live in Texas.
- Have a credit score of 720, or 690 if you’re applying with a cosigner.
- Make at least $60,000, or $30,000 if you’re applying with a cosigner.
- Have a strong credit history.
- Be a US citizen, permanent resident or have a work or student visa if applying with a cosigner.
- Be at least 18 years old.
First, am I eligible?
Brazos has an unusually long list of eligibility requirements for its parent loans. Here’s how they break down.
You must …
- Live in Texas.
- Have a credit score of 720, or 690 if you’re applying with a cosigner.
- Make at least $60,000, or $30,000 if you’re applying with a cosigner.
- Have a strong credit history.
- Be a US citizen, permanent resident or have a work or student visa if applying with a cosigner.
- Be at least 18 years old.
The student must …
- Attend a four-year, accredited Title IV, nonprofit school.
- Be enrolled at least half-time in a degree-granting program.
- Sustain satisfactory academic progress — typically a C-average.
The student doesn’t have to be a Texas resident or attend school in Texas.
Your cosigner must …
- Have a credit score of at least 720.
- Make at least $60,000 a year.
- Be a Texas resident.
- Be at least 18 years old.
- Be a US citizen or permanent resident.
How do Brazos parent loans work?
Brazos Education Lending Corporation is a nonprofit direct lender that offers parent student loans to pay for undergraduate and graduate degrees. It presents itself as an alternative to Parent PLUS loans, which tend to have the higher interest rates than other federal loans and less repayment, forbearance and forgiveness options.
While Brazos calls these parent loans, that name isn’t entirely accurate. You can use this loan to pay for any student’s education, even if you aren’t related in any way. Parent PLUS loans are only available for undergraduate degrees, but Brazos parent loans can pay for any degree — law school, medical school, an MA in dinosaur psychedelics — it doesn’t matter what the program is as long as it meets Brazos’s eligibility requirements.
How much do Brazos parent loans cost?
Brazos doesn’t charge any fees for applying or paying off your loan early, so the main cost to pay attention to is interest. Brazos offers two interest rate options: fixed and variable rates.
Fixed rates
Fixed rates are just what they sound like. They stay the same the entire time you pay back your loan, giving you the same repayment each month. If you apply for a fixed rate, you’ll get something in the range of 4.15%–6.74% (with autopay), including a 0.25% autopay discount.
Variable rates
Variable rates can go up and down while you pay back your loan. Currently, Brazos offers variable rates ranging from 4.45% to 7.21% including the 0.25% autopay discount. That doesn’t mean you will always get a rate in that range, though.
Here’s why. Brazos comes up with your variable rate by first giving borrowers a smaller fixed rate — called a margin rate — between 2.6% and 5.36%. Each month, it adds your margin rate to the one-month LIBOR rate. This is a type of benchmark, or a rate set by a third party that reflects trends in the lending market. If lots of banks start charging higher interest rates, the LIBOR goes up. If they start charging lower interest rates the LIBOR goes down.
How Brazos comes up with your rate
What rate you get mainly depends on two things: your loan term and creditworthiness. The lowest interest rates go to borrowers with the highest credit scores and shortest loan terms. Lower credit scores and longer loan terms give you higher interest rates.
Does Brazos offer any discounts?
It does. You can get 0.25% knocked off of your interest rate by signing up for autopay.
What are my repayment options?
Brazos only offers one standard repayment plan where borrowers make repayments on the loan’s principle plus interest each month. You can, however, adjust your monthly repayments by going for a longer or shorter loan term.
With Brazos parent loans, you have a choice between loan terms of 4.15%–6.74% (with autopay) to 20 year(s). Shorter loan terms are less expensive. As we mentioned before, shorter terms come with lower rates. But you’ll also make less interest payments, meaning you’ll ultimately pay less in interest. The downside is that they come with higher monthly repayments — sometimes unaffordably high.
Longer loan terms might seem attractive at first because the lower monthly repayments will have less of an immediate impact on your finances. But the interest rates are higher and you’ll make more interest payments, making your loan more expensive. To hit the right balance, you might want to go for the shortest loan term you can comfortably afford to repay.
Forbearance
While Brazos parent loans don’t have as extensive deferment and forbearance options as Parent PLUS loans, they do offer three different types of forbearance.
- Economic hardship forbearance lets borrowers hold off on repayments for three months at a time if they lose their job or face another financial catastrophe. You can get up to 12 months of economic hardship forbearance.
- Military forbearance lets borrowers called to active duty put their loan repayments on hold for up to a total of 36 months.
- Natural disaster forbearance allows borrowers to stop making loan repayments for three months at a time. Like economic hardship forbearance, you can qualify for a total of 12 months of natural disaster forbearance.
Top reasons to consider Brazos parent loans
- Competitive rates. If you have excellent credit, you could qualify for rates much lower than federal parent loans.
- You don’t actually have to be a parent. You can be an aunt, cousin, friend of the family — your relationship doesn’t matter with this parent loan.
- Not just for undergrads. You can cover the cost of any degree as long as it’s from an eligible program.
- Multiple forbearance options. You won’t have to worry about your repayments sent to collections if you fall on tough times or are called to serve your country.
Why you might want to look elsewhere
- Good to excellent credit required. Even if you want to apply with a cosigner, you must have a credit score of at least 690 to be eligible.
- Only one repayment plan. While Parent PLUS loans are limited, they still have more repayment options than Brazos parent loans.
- For Texans only. True, the student doesn’t need to be a Texas resident, but you can’t live in any other state to take out this loan.
- No cosigner release. If you apply with a cosigner, you can’t take them off your loan without refinancing.
Compare other student loans
What do customers say about Brazos parent loans?
There isn’t much about Brazos Education Lending Corporation online, which funds Brazos parent loans. It has no Better Business Bureau (BBB) or Trustpilot page. Its parent company, Higher Education Service Corporation, has a BBB page, however. It gets an A- review based on its failure to respond to one complaint filed against the company. The customer claimed she had been given a Brazos loan that she didn’t want and wasn’t aware she had applied for it.
We weren’t able to find customer comments specifically about Brazos parent loans, but the few we found about Brazos in general were negative. One customer had trouble with Brazos’s loan servicer, Firstmark, particularly when it came to customer service. Another had difficulty affording their student loan payments, which included a Brazos loan. A third thought they could qualify for a better rate than what Brazos offered.
With that said, there are so few online reviews of Brazos student loans and none specifically concerning its parent loans that you might not want to give customer comments too much weight.
What to expect when signing up
Before you apply, first make sure you’re eligible or have an eligible cosigner on hand. Meet the requirements? Get together the following documents and information:
- Proof of Texas residence. Brazos recommends a Texas state ID or driver’s license. If you’re applying with a cosigner, they also need proof of residence.
- Your Social Security number. Your cosigner will also need to submit their Social Security number.
- Your address. This should be your permanent address.
- Proof of income. Depending on your job, this could be your two most recent paystubs, your most recent tax return or 1099 forms.
- The student’s personal information. You’ll need their date of birth and Social Security number.
- The school’s name, cost of attendance and financial aid award. You can typically find all of this on the financial aid award letter the student receives from the school.
- Contact information for a reference. Brazos uses the reference to verify your identity. It can’t be the student or the cosigner.
How to apply?
Got everything together? Now you’re ready to apply.
- Go to the Brazos site and click Apply Now. You’ll be directed to the Firstmark site, which processes and services Brazos student loans.
- Click Register as a new user and create an account by entering your name and email and making a password. Click Verify Email.
- Log in to your email account and open the email from Brazos. Click the link to verify your email address.
- Create a name for your application and select Brazos Parent Loan before hitting Start a New Application.
- Read the directions to complete your application, reviewing the terms and conditions before submitting it. You’ll get an instant response letting you know if you prequalify with directions on which documents you need to submit.
- Upload and submit any required documents.
- Wait for Brazos to verify the cost of the student’s school — this part can take a week or so.
- Review and sign the loan documents.
Give yourself a couple of weeks from start to finish for the Brazos parent loan application. Your repayments will begin 30 days after the school receives the funds.
How to apply step by step with screenshots
Bottom line
Brazos parent loans could be a good alternative to federal loans for Texas residents who want to pay for a graduate or professional degree. It could even get you a better rate if you have flawless credit. However, its repayment plans are less flexible than what you’d get with a Parent PLUS loan and it doesn’t offer cosigner release if you need help qualifying.
Want to find other parent loans or learn more about how student loans work? Check out our guide to the ins and outs of student loans.
Interested in refinancing? Brazos offers student loan refinancing as well.
Frequently asked questions
Image Source: Shutterstock and studentloans.com/student-loans/parent-loans.html