College students have several options available to them. They can pay for college tuition out-of-pocket, perhaps with a credit card or cash savings. Moreover, they can apply for a variety of college loans such as a Federal or private student loan.

Another option available to graduate and undergraduate students is the PLUS student loan. This type of student loan allows parents to borrow money for their child's education. Unlike other types of student loans, the student is not responsible for the PLUS loan. Upon graduation, parents are obligated to repay the loan.

There are advantages and disadvantages to PLUS student loans. Getting approved is relatively easy. These student loans require no collateral. And since the loans are non-need based, there is no income cap. The interest is tax deductible and repayment doesn't begin until six months after graduation.

Unfortunately, PLUS student loans require a credit check. To qualify for funds, parents must have satisfactory credit. A late payment within the past 90 days or a bankruptcy within the past five years can disqualify an applicant.