Parent Loans for Undergraduate Students. A non-need-based loan made to the parents of an undergraduate student. This loan is made from the federal government and is processed much like a consumer loan. It is dependent upon the borrower's credit rating and does not have a stated maximum amount. Parents may borrow up to the difference between education costs and financial aid received. Repayment begins two months after the loan proceeds are disbursed and must be repaid within ten years.