Paying for college can feel overwhelming, especially as tuition continues to rise. Even with scholarships, grants and savings, many families still face a gap between available resources and the total cost of education.
For SEIU members and their families, understanding how to choose a student loan is an important step in planning ahead. Whether you are a student preparing for school or a parent helping cover costs, knowing your options can help you make more informed borrowing decisions.
How to Pick the Right Student Loan for Your Needs
Choosing the right loan depends on who is borrowing and what stage of education they are in.
Most borrowers fall into one of three categories:
- Students entering undergraduate programs
- Graduate or professional students continuing their education
- Parents helping cover a child’s education costs
Many families begin by reviewing federal student loans. If those options do not fully cover the cost of attendance, private loans can help bridge the remaining gap.
Start With Federal Student Loans
For many families, federal student loans are the first step. These loans often offer fixed interest rates, flexible repayment options and built‑in borrower protections.
Federal Direct Loans have annual and aggregate borrowing limits. Students who reach those limits may need to consider other financing options.
To apply, students must complete the Free Application for Federal Student Aid (FAFSA).
Direct Subsidized Loans
These loans are available to undergraduate students with financial need. A key benefit is that the government pays the interest while the student is in school at least half time and during certain grace periods.
Direct Unsubsidized Loans
These loans are available to undergraduate, graduate and professional students regardless of financial need. Interest begins accruing as soon as the loan is disbursed.
Starting July 1, 2026, new annual and lifetime borrowing limits apply to federal student loans. Undergraduate annual limits are not changing. For graduate and professional students, the limits are:
- Graduate students: up to $20,500 per year, with a $100,000 total (aggregate) limit for graduate study
- Professional students (such as law or medicine): up to $50,000 per year, with a $200,000 total (aggregate) limit
A combined lifetime federal borrowing limit of $257,500 also applies across undergraduate, graduate and professional study (Parent PLUS loans are counted separately). If you reach this limit, you will not be eligible for additional federal loans.
Direct PLUS Loans
These loans are available to:
- Parents of dependent undergraduate students
Starting July 1, 2026, Parent PLUS borrowing is capped at $20,000 per year per student, with a $65,000 lifetime limit per student. (Before July 1, 2026, parents could borrow up to the full cost of attendance minus other aid.) Approval is based on a basic credit check.
Note: The Grad PLUS loan program is set to end July 1, 2026. Graduate and professional students can no longer take out Grad PLUS loans and will rely on Direct Unsubsidized Loans (up to the new limits above) and, if needed, private loans to cover remaining costs.
Federal Repayment and Forgiveness Options
Federal loans offer flexibility when it comes to repayment. Federal student loan borrowers may be eligible for several repayment options, including Standard, Graduated, Extended and certain Income-Driven Repayment (IDR) plans, which adjust monthly payments based on income.
Available plans may change based on federal regulations and loan type.
Borrowers who work full time for qualifying government or nonprofit employers and make the required qualifying payments may be eligible for Public Service Loan Forgiveness (PSLF), which forgives the remaining federal student loan balance after meeting program requirements.
When Private Student Loans Can Help Fill the Gap
Federal aid, scholarships and grants may not always cover the full cost of education. In these cases, private student loans can help fill the remaining gap.
Private loans typically allow borrowers to:
- Cover up to the full cost of attendance
- Choose from multiple repayment terms
- Select repayment options that fit their budget
For SEIU members, comparing loan terms, repayment flexibility and total cost can help identify the right fit.
It is also important to compare fixed and variable interest rates. Fixed rates stay the same over the life of the loan, while variable rates can change over time, which may affect monthly payments and the total amount repaid.
Some private student loan lenders may require a creditworthy cosigner, particularly for undergraduate students with limited credit history.
Before choosing a private loan, it can also be helpful to explore personalized borrowing options and repayment scenarios using the SEIU Student Debt Navigator.
Options for Parents Borrowing for College
Parents who want to support their child’s education may consider borrowing in their own name rather than co‑signing a student loan. Parents may choose between federal Parent PLUS Loans and private education loans, depending on their financial circumstances and eligibility.
Parent loan options often allow borrowers to:
- Use their own credit profile
- Cover remaining education costs
- Choose repayment timelines based on their financial situation
Understanding how parent loans work can help families decide whether to borrow jointly or separately.
Factors to Consider Before Borrowing
Before taking on student debt, it’s important to look at the bigger financial picture.
Consider:
- Expected income after graduation
- Available savings or financial aid
- Total borrowing amount
- Monthly payment affordability
- Long-term repayment timeline
- Interest rate type, including whether the rate is fixed or variable
- Total interest paid over the life of the loan, not just the monthly payment
Interest rate type can make a meaningful difference in long-term cost. Even if a loan has a manageable monthly payment, the total interest paid over the life of the loan can significantly increase the full amount repaid.
Setting a borrowing limit and understanding repayment options ahead of time can help avoid financial strain later.
If you already have existing student loans or plan to borrow multiple loans over time, reviewing options early can make repayment easier. Tools like the SEIU Student Debt Navigator can help you compare scenarios and stay on track.
When Refinancing May Be Worth Exploring
If you or your family already have student loans, refinancing may be an option to consider in the future.
Refinancing can help:
- Lower your interest rate
- Reduce your monthly payment
- Combine multiple loans into one
However, refinancing federal loans means giving up federal protections, so it is important to fully understand the trade‑offs.
If you are exploring ways to lower your rate or simplify your payments, the SEIU Student Loan Refinance Program may be worth reviewing.
Make a Plan That Fits Your Financial Goals
Choosing the right student loan is not just about getting approved. It is about understanding how that loan fits into your long-term financial plan.
By starting with federal options, comparing private loans carefully and reviewing repayment strategies in advance, SEIU members and their families can approach college financing with more clarity and confidence.
Looking for help choosing the right loan or managing existing student debt?
You can explore personalized guidance based on your situation.