Parent Loans or Student Loans – what is going to be best for my child?


Loans : Parent Loans or Student Loans – what is going to be best for my child?	Homepage \| Add to Favorites

Recommended Sites

Related Links

Informative Articles

Auto Loans After Bankruptcy – Should You Finance A New Or Used Car?
Deciding whether to purchase a new or used car is a big decision, especially if you have just filed a recent bankruptcy. Of course, the decision is largely based on how bad you need a vehicle. There are valid reasons for financing a new or used car...

Bad Credit Mortgage Loans – How To Get Approved
Persistence is the key working toward getting approved for a bad credit mortgage loan. There are many factors that you, as a borrower have control over that can help you get approved faster and easier. There are guidelines that most sub-prime...

Car Loans After Bankruptcy - Financing Auto Loans With High Risk Lenders
Bouncing back after bankruptcy is easier than most people think. The key to rebuilding credit involves re-establishing a good payment history with new creditors. To do this, you must apply for new accounts. Getting approved for new lines of credit...

Debt Consolidation Loans - Defining the Pros and Cons of the Method.
Debt consolidation agencies allege that debt consolidation loans can help create savings for its customers by reducing the amount to be paid for debts. The manner in which this will be realised is not immediately comprehensible to most people. Why...

Payday Loans - Answers to Short Term and Occasional Problems
Payday loans are an option that can help you get past a minor crisis or unforeseen expense. But before you take advantage of this option, take a look at the long-term cost, conditions and other options. First, keep in mind that payday loans...

Parent Loans or Student Loans – what is going to be best for my child?

Parent Loans or Student Loans – what is going to be best for my child?

At least 20% of college students need some type of loan to help pay for their college education. Such a statistic can lead to students graduating with an unmanageable debt load. An alternative is for parents to help out by taking out loans themselves. But which is the better option – student loans or parent loans? Each has distinct advantages and uses.

Federal student loans
Federal student loans have the lowest interest rates and best repayment options. If you need to take out loans and you qualify for federal loans, this is your best choice. Just be sure to accept only the funds you need, even if you are offered much more. Parents can always help their children pay off these loans once repayment begins after graduation.

Federal parent loans
PLUS Loans (Parent Loan for Undergraduate Students) are another loan option that comes with low interest rates. If you are a parent with dependent students attending college at least part-time and you have a good credit history, you are eligible to receive a PLUS Loan. These loans are not needs-based. You can borrow up to the total cost of undergraduate education expenses, minus other financial aid already received. Unlike federal student loans, payment is not deferred until after graduation; instead, your first loan payment will be due about 60 days after the loan is disbursed. Also unlike federal student loans, PLUS Loans require an application fee.

Private loans
Both students and parents can take out private loans to cover funding gaps. Terms are basically the same for these loans, although students may be able to have their repayment deferred until after graduation. Another consideration is that students may wish to take out small loans to begin to establish a credit history. You may need to cosign for private student loans.

Other options
Parents do have some additional options for college funding, such as home equity loans. These often have rates as good as private loans.

So which type of loan should I get?
This really comes down to a personal decision. Ask yourself these questions as you are trying to decide:

-What level of debt do you feel is manageable for your child to graduate with?
-How important is it to you that your child takes responsibility for paying student loans?
-Will you and your child work out a repayment plan to repay PLUS Loans and other parent loans?

This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about Parent Loans or Student Loans at http://www.NextStudent.com .

About the Author
My goal is to help every student succeed - education is one of hte most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.