Where To Get Your College Funds

A family with an incoming college student can expect to go through tough times financially. Tuition and dormitory fees can take away more than $40,000 from the parents’ pockets. Then, there are fees labs, books, meals and health insurance that also need to be paid. Sending a child to college is just too expensive! Well, parents have to be smart about all this and turn to grants – federal, state, and university – as well as secondary scholarships to fund the education of their child. The amount that grants and scholarships cannot cover can be paid for with the parents’ savings and student loans. As for student loans, parents can choose between Stafford student loans and private student loans.  

Stafford Federal Loans

Stafford public loans cannot offer just any amount to borrowers. The amount is limited and the interest rates are based on financial need. Banks, privately funded institutions and credit unions offer this kind of loan. Typically, repayments are made upon the student’s graduation. Stafford student loans have the lowest interest rates as well as the most lenient terms. 

Parent Loans for Undergraduate Students

PLUS loans are federal loans that parents can apply for if the student is a dependent of the parent. For this type of loan, a credit evaluation of the borrower is conducted. The parent can borrow an amount that is to the full balance of the contribution expected for the family. Plus, the rates are affordable compared with home equity loans. A lot of local community banks join in the PLUS program.

Private Student Loans

Private student loans depend on the individual credit score of the student and the cosigner’s credit score. These loans have fixed interest rates. However, the lender adjusts the rates depending on the applicant’s credit worthiness. Typically, students who will set foot in college are below 24 years old. This means they still do not have a credit history. Because of this, they are lumped into the high-risk category of borrowers and will have to pay higher rates. But then, if a student-applicant has a cosigner with good credit, he will get the chance to be charged lower interest rates. A tip you need to remember is you stand better chances of getting approved for a private student loan for college in Bucks County if you apply for it form a credit union or a local bank. A credit union that lends loans to members interested in fixing credit scores. 

To sum up

A high percentage of students who attended college in 2011 asked for help from federal grants or private loans. In fact, more than 65% of the college students borrowed some money to back four-year degrees. Students want their four-year degrees as they can help them find good jobs after graduation. Furthermore, individuals with post-grad units stand better chances of advancing in their field. So, this implies that a college education is not a waste of time and money. However, the parents and the students should think twice about borrowing too much than necessary. 

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