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Anna Serio is a staff writer untangling everything you need to know about personal loans, including student, car and business loans. She spent five years living in Beirut, where she was a news editor for The Daily Star and hung out with a lot of cats. She loves to eat, travel and save money.
You can help pay for your loved one’s education without being a parent — all while taking advantage of low rates. The catch? It’s only available in Texas, and you need strong credit to qualify.
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. As an alternative to Parent PLUS Loans, Brazos offers lower interest rates and more repayment, forbearance and forgiveness options.
While Brazos calls these parent loans, it 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. And federal Parent PLUS Loans are only available for undergraduate degrees, while a parent loan from Brazos can be used 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 fixed and variable rates.
Fixed rates are just what they sound like: They stay the same over your loan term, giving you the same repayment each month. If you apply for a fixed rate, you’ll get something in the range of
3.5% to 6.74%
, including a 0.25% autopay discount.
Brazos comes up with your variable rate by first giving borrowers a smaller fixed rate — called a margin rate — between 3.38% and 6.62%, which includes a 0.25% autopay discount. Then each month, it adds your margin rate to the one-month LIBOR rate. This means the amount you owe each month may increase or decrease, so adjust your budget accordingly.
How does Brazos determine my rate?
The 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 typically result in higher interest rates.
Does Brazos offer any discounts?
It does. You can get 0.25% knocked off your interest rate by signing up for autopay.
What are my repayment options?
Brazos only offers one standard repayment plan for its loans, which may last anywhere from
5 to 20 years
. You’ll 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. But remember: The longer your loan term, the more you’ll pay in interest.
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.
What student loan servicers does Brazos use?
The everyday handling of loans provided by Brazos is done by third-parry servicer Firstmark. Through Firstmark, you’ll be able to pay off your loan in several ways, including online, over the phone, and via check. However, some borrowers have complained about subpar customer service. Read our review to learn how to make the smoothest experience out of repaying your loan.
Top reasons to consider Brazos parent loans
Competitive rates. If you have excellent credit, you could qualify for rates much lower than federal Parent PLUS Loans.
You don’t 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 loan options
Updated September 17th, 2019
What do customers say about Brazos parent loans?
While there isn’t much about Brazos Education Lending Corporation specifically, its parent company, Higher Education Service Corporation, has a BBB page. It gets an A- review based on its failure to respond to one complaint filed against it. The borrower claimed they had been given a Brazos loan that they weren’t aware they had applied for it.
We weren’t able to find borrower comments specifically about Brazos parent loans, but the few we found about Brazos in general were negative. One person 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 borrow 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.
Documents you’ll need
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? Follow these steps 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. 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 clicking 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 and wait for Brazos to verify the cost of the student’s school — this part can take a week or so. Then Brazos will send you your loan documents to review and sign.
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 your loan funds.
How to apply step by step with screenshots
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 a Parent PLUS Loan, and it doesn’t offer cosigner release if you need help qualifying.
No. Like with other parent loans, full repayments are due one month after the loan is disbursed.
You might be able to if you meet certain eligibility requirements. Consult a tax professional to learn if it’s possible and how much you can deduct.
It depends. If you applied for less than the school-certified cost, you’ll get the amount you applied for. If you applied for more than the school-certified cost, then you’ll receive the school-certified cost.
Image Source: Shutterstock and studentloans.com/student-loans/parent-loans.html
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