Which AI Software Offers The Greatest Pupil Mortgage Suggestions?

When households weigh their choices for paying for school, the query “What’s the very best pupil mortgage?” appears easy. However as we discovered after asking 5 main AI fashions (ChatGPT, Grok, Perplexity, Copilot, and Google Gemini) the solutions could be incomplete, typically unclear, and sometimes deceptive.

Every software supplied a broad framework: begin with federal loans, then contemplate personal loans if wanted. But crucial particulars had been typically lacking.

In some circumstances, explanations failed to notice that Direct Backed Loans require demonstrated monetary want. None clearly spelled out federal borrowing limits, an omission that might depart households unprepared if federal assist runs brief. And even particular eventualities or borrowing order (resembling borrow the scholar’s Direct Mortgage first, then complement with Personal or Guardian PLUS Loans).

Final yr, we found that Google’s AI was getting monetary solutions incorrect 43% of the time.  

Relating to pupil mortgage suggestions, the outcomes had been higher, however there have been nonetheless key misses in an areas the place coverage change, rates of interest differ, and borrower protections shift often.

What We Requested And How The Fashions Responded

The query we posed to every mannequin was easy: “What’s the greatest pupil mortgage?” We wished to see whether or not the instruments might information a potential borrower towards essentially the most cost-effective and smartest selection whereas protecting the total vary of related issues.

The outcomes had been blended. We gave every reply a score (Good, Common, Poor) primarily based on what it received proper, what it received mistaken or missed, and if the reply had any factual errors.

ChatGPT

ChatGPT gave a broad overview, figuring out federal Direct Backed Loans as the place to begin and mentioning choices like Direct Unsubsidized, PLUS, and personal loans from lenders resembling Faculty Ave, Ascent, Sallie Mae, SoFi, and MPOWER. It supplied lender suggestions by borrower kind however didn’t clarify the necessity requirement for backed loans or define borrowing limits. And the “completely different conditions” piece all map to non-public lenders…

Ranking: Common

What It Obtained Proper: Federal pupil loans are the very best place to begin.

What It Missed: It does not share that Direct Backed Loans require a monetary want. It additionally does not share that Unsubsidized loans have a low cap. It does not point out the modifications to PLUS Loans in any respect – and does not reference Guardian PLUS or Grad PLUS (it does not distinguish between undergraduate and graduate faculty).

Factual Errors: No actual errors, nevertheless it ends with “Simply Ask” – who’re you purported to ask?

Perplexity

Perplexity supplied a extra detailed rationalization of federal mortgage sorts and rates of interest, together with a breakdown of personal lender strengths. It famous that federal loans typically have decrease charges and extra protections however nonetheless missed a direct acknowledgment of the necessity requirement for backed loans.

Ranking: Poor

What It Obtained Proper: Federal pupil loans are the most suitable choice for many college students.

What It Missed: It does not share that backed loans require a monetary want. It additionally does not present any actual “order of operations” or information for households. Simply jumps from Direct Backed Mortgage to non-public loans.

Factual Errors: The federal Direct Backed Mortgage rate of interest is 6.39% (not 3.73% because it mentions). Guardian PLUS and Grad PLUS loans are 8.94% (not 6.28%).

Grok

Grok did lots of reasoning and had an enormous output, however we appreciated that it gave a “remaining reply”. And that reply was typically appropriate – even giving an order of operations for households to contemplate.

It touched on technique, resembling utilizing a cosigner for higher charges, however neglected any dialogue of mortgage caps or when the order of operations would come into play.

Ranking: Good

What It Obtained Proper: Federal pupil loans are the most suitable choice and it received a good order of operations.

What It Missed: It solely recommends two personal lenders (SoFi and Sallie Mae) and does not actually elaborate why.

Factual Errors: None

Copilot

Copilot began their output with “prime choices” that was mainly a non-public pupil mortgage lender desk. Solely then does it return to “discover federal choices”. It adopted it up by an unrelated part concerning the new Reimbursement Help Plan (RAP) launching in 2026 – however that is not a related reply to the query.

Ranking: Poor

What It Obtained Proper: It received the main points concerning the federal mortgage packages appropriate.

What It Missed: It led with personal pupil loans, it did not point out when it is best to contemplate which sort of mortgage, and it supplied a piece a couple of pupil mortgage reimbursement plan that does not go into impact but.

Factual Errors: No factual errors, however a poor output.

Gemini

Google Gemini delivered essentially the most organized reply – and although it hedged itself on mortgage selections being private, it nonetheless highlighted that federal pupil loans needs to be thought-about first. It accurately outlined Direct Backed Loans as need-based and highlighted key advantages like fastened charges, income-driven reimbursement, and pupil mortgage forgiveness packages. 

Nonetheless, it didn’t point out federal borrowing caps, which generally is a deciding consider whether or not personal loans are obligatory.

Ranking: Good

What It Obtained Proper: It supplied rule about utilizing federal pupil loans first earlier than personal loans.

What It Missed: It did not spotlight the mortgage caps on Federal loans, or the potential upcoming modifications to federal pupil mortgage choices that will make personal loans extra enticing.

Factual Errors: None

What Is The Right Reply?

All 5 fashions agreed that federal loans needs to be the primary cease for many college students, and for good motive: they provide fastened rates of interest, income-driven reimbursement plans, deferment and forbearance choices, and potential forgiveness packages.

Inside that class, Direct Backed Loans are typically essentially the most borrower-friendly as a result of the federal government pays the curiosity whereas the scholar is in class not less than half-time and through sure deferment durations. However they’re solely out there to undergraduates with demonstrated monetary want.

That distinction issues. A pupil who assumes they’ll qualify for a backed mortgage with out making use of for federal assist might be caught off guard when the supply doesn’t arrive. Likewise, the absence of any point out of annual and mixture mortgage limits leaves households unaware that even when they qualify for federal loans, they might nonetheless face a niche of their financing plan.

Anyway, for undergraduates, the proper reply each time is:

• Borrow the Direct pupil mortgage first (whether or not backed or unsubsidized) as much as the mortgage restrict
• Then have a look at both Guardian PLUS or Personal pupil loans

The Guardian PLUS vs. Personal pupil mortgage debate may be very nuanced – and the battle is shifting extra in direction of personal pupil loans after the One Massive Stunning Invoice Act was signed. 

The place Do Personal Pupil Loans Match In?

As soon as federal choices are exhausted, personal loans could also be obligatory to shut the hole between assist and the entire value of attendance. That is the place the AI fashions diverged most of their suggestions.

Some centered on particular lenders (pulling generic quotes from their advertising and marketing):

• Faculty Ave for quick approval and versatile phrases
• Ascent for college students with out a cosigner
• Sallie Mae for specialised packages like regulation or medical faculty
• SoFi for borrower perks resembling profession teaching
• MPOWER Financing for worldwide college students with out U.S. credit score historical past

Others gave normal ideas, resembling evaluating APRs, checking for charges, or selecting between fastened and variable rates of interest. However none talked about that rates of interest for personal loans can differ extensively (from beneath 3 p.c for well-qualified debtors to double-digit charges for these with weaker credit score) or that reimbursement choices are sometimes much less versatile than federal packages.

Some talked about lack of forgiveness packages – however all of the AI choices had been mainly scraping “greatest personal pupil mortgage” lists.

What About Upcoming Coverage Modifications?

A number of fashions briefly referenced upcoming federal mortgage modifications, resembling the phase-out of the SAVE reimbursement plan and new RAP Plan. One briefly talked about how these modifications might push extra debtors towards personal loans, however could not let you know why.

It was additionally apparent that the fashions could not distinguish between Guardian PLUS Loans (which proceed ahead with new caps) and Grad PLUS Loans (that are being eradicated).

Lastly, whereas most highlighted deferment and forbearance as choices, none mentioned the huge modifications coming with deferment and forbearance packages.

Backside Line On AI Pupil Mortgage Suggestions

Whereas AI fashions can ship a fast overview, they don’t seem to be a substitute for a whole pupil mortgage technique. All 5 instruments accurately recognized federal loans because the most secure place to begin. However key omissions (from borrowing limits to eligibility necessities) could lead on a household to overestimate how a lot federal monetary assist will cowl, or misunderstand when personal loans turn out to be obligatory.

A borrower who used AI recommendation as their sole useful resource would possibly find yourself with an incomplete plan, notably in the event that they didn’t cross-check the main points with the Federal Pupil Support web site or a monetary assist officer.

As with most AI-generated content material, the knowledge is just nearly as good because the immediate, the mannequin’s coaching (what web sites they stole their content material from and when it was final checked), and the consumer’s skill to fact-check. However that final half is tough: if a consumer does not have information of a topic, it turns into more and more troublesome to fact-check.

On the finish of the day, debtors in search of pupil loans ought to concentrate on instruments and specialists and types which have deep information within the house, and are identified specialists. Not AI instruments.