 |
Federal Parent Loans
|
Parent Loans or Student Loans - what is going to be best for mychild?
Author: Vanessa McHooley
At least 20% of college students need some type of loan to helppay for their college education. Such a statistic can lead tostudents graduating with an unmanageable debt load. Analternative is for parents to help out by taking out loansthemselves. But which is the better option - student loans orparent loans? Each has distinct advantages and uses.
Federal student loans Federal student loans have the lowestinterest rates and best repayment options. If you need to takeout loans and you qualify for federal loans, this is your bestchoice. Just be sure to accept only the funds you need, even ifyou are offered much more. Parents can always help theirchildren pay off these loans once repayment begins aftergraduation.
Federal parent loans PLUS Loans (Parent Loan for UndergraduateStudents) are another loan option that comes with low interestrates. If you are a parent with dependent students attendingcollege at least part-time and you have a good credit history,you are eligible to receive a PLUS Loan.
These loans are notneeds-based. You can borrow up to the total cost ofundergraduate education expenses, minus other financial aidalready received. Unlike federal student loans, payment is notdeferred until after graduation; instead, your first loanpayment will be due about 60 days after the loan is disbursed.Also unlike federal student loans, PLUS Loans require anapplication fee.
Private loans Both students and parents can take out privateloans to cover funding gaps. Terms are basically the same forthese loans, although students may be able to have theirrepayment deferred until after graduation. Another considerationis that students may wish to take out small loans to begin toestablish a credit history. You may need to cosign for privatestudent loans.
Other options Parents do have some additional options forcollege funding, such as home equity loans. These often haverates as good as private loans.
So which type of loan should I get? This really comes down to apersonal decision. Ask yourself these questions as you aretrying to decide:
-What level of debt do you feel is manageable for your child tograduate with? -How important is it to you that your child takesresponsibility for paying student loans? -Will you and yourchild work out a repayment plan to repay PLUS Loans and otherparent loans?
This article is distributed by NextStudent.
About the author:My goal is to help every student succeed - education is one ofhte most important things a person can have, so I have made itmy personal mission to help every student pay for theireducation. Aside from that, I am just a pretty average girl fromSD.
parent loans to online-loans-pro.com home