The moment your child is accepted to his or her college of choice may be bittersweet from a parent’s perspective. While you will likely be excited and proud of your child, you may be immediately wondering how you are going to pay for his or her education. Aside from scholarships and federal grants, here are the options you have to fund your child’s college career.
Direct student loan
A direct student loan is issued directly to the student after the FAFSA is filed. The maximum loan amount for freshmen is $5,500, and students become eligible for moderately higher loans when they are in their sophomore, junior and senior years. These loans have a fixed interest rate of 3.86% for the first year, and they may have deferred interest while your child is in school.
Parent plus loan
Parents are also eligible for loans to cover college expenses. These loans are based on the true cost of attendance, which includes room and board, tuition, books and transportation. This number minus the amount of student grants and loans is the total that can be lent to parents with an interest rate of 6.41%. Qualification for a parent plus loan is based on a light credit check and completion of the FAFSA for the current year.
Private student loan
If federally subsidized loans are not enough to pay for your child’s education, he or she may turn to private student loans. These loans do have a low interest rate to start, but rates can skyrocket when payments are missed. In most cases, a co-signer will be needed for a private loan.
For a closer look at the payment options for college, visit College Planners of America for personalized planning and guidance. You can reach College Planners at 630-971-2300 or by visiting their website.