Some Tips on How to Find Student Loans for Parents
Student loans for parents are the loans taken by the parents on behalf of their son or daughter to assist in paying for tuition and other education related expenditures at a college or university. For these kinds of loans to be passed the parents must have a good credit history and pass the credit check and child must be enrolled into the school for no less than half-time. There are different kinds of parent loans for students. Some of them are Federal PLUS loans, Grad PLUS loans and there are some non-need credit based loans offered by the private institutions.
You might have several options to pay for your child’s school expenses as a parent for example: – parent loans, retirement funds, and your personal savings. The best and cheapest option is to use your savings if you could save some money. However, if you don’t have enough savings you can go for parent student loans. Some parents could afford the tuition fees without burrowing any parent loans but for many parents their savings cannot cover the whole education expenses and that’s when the student loans for parents come handy.
The most general kinds of student loans for parents are the Direct PLUS loans. These types of loans are taken in your name with giving your child a financial burden on their head. In this type of loan the parent is sole responsible for repayment of the loan. However, if you don’t want the loan in your name then you could search for a private student loan and be the cosigner. In these types of private student loan, the loan is in the name of student but you are also accountable for becoming the cosigner.visit the website http://www.forbes.com/fdc/welcome_mjx.shtml.
The private loans include all the expenses for the student’s tuition, books, accommodation, a computer, and travel. In short you can burrow the total expenses of your child’s education. These loans are easy, fast and convenient. You can also get an instant pre approval for the loan. The interest rates for the private loans vary with the institute you choose. They usually have fewer repayment plans than the federal parent student loans.
In order to get the Direct PLUS loan all the parents need to meet the certain criteria. The parent needs to be the biological or adoptive or step parent of the student. The child of yours who is going to school needs to be a dependent student who is enrolled for at least half-time in the school that participates in the Direct PLUS loan program. The child or the student needs to be unmarried and his/her age should not exceed 24 at the time you are applying for the loan.
The parent should not have any other legal dependent when the application is submitted. All of your income and properties information should be reported to FAFSA, if the student is considered as the dependent. The parent needs to have a very good credit history. The credit history will be checked before taking the loan application into considerations. The parent and the child must be citizen of United States or at least eligible non citizen and meet the eligibility requirement for the Federal Student Aid programs.
Moreover, there is no limitation on the loans you get but it cannot exceed the cost of student’s education. The school you attend determines the loan you can obtain. The interest rate for Direct plus loan is exactly 7.9 percent and your interest will start the first day your loan is paid out. You should also pay the commencing fee of 1 percent of your principal loan amount along with the interest. That commencing fee is deducted from the loan amount we will get that is why the loan amount is usually lesser than the amount you need to repay. If a parent of the dependent student could not get the Direct PLUS loans, the student can still apply for additional Direct Unsubsidized Loan.
Some tips on what a parent should do before borrowing the student loans
As a parent you will always want to assist you children in every possible ways you could. Along with all other necessities in life you would want your child to complete his/her education and you would wish to assist them with all the financial burdens so that your son or daughter could study peacefully without the burden of loan on their head. Here are some tips about what those parents should do before borrowing money for their child’s education.(click here)
• Complete the FAFSA with your child
• Try assisting your child find some college scholarships and grants.
• Be careful when you compare the cost of the college your child wants to enroll with other colleges.
• Evaluate the financial aid letter issued by the college along with your child
• Try to find out the lowest cost student loans from the government. For instant choosing the Direct Plus loan.
• If you don’t want the loan in your name then you can act as a cosigner in his/her private student loan.
How is the parent student loans disbursed?
The student loans for parents usually cover all the education expenses of full year of study and the student’s school will make at least two pay outs to student’s account. The student can use this account money to use in his/her educational expenses. If anyway the amount paid out surpasses the student’s school charges, the school will pay the remaining balance through the check or by any other means. In some rare cases, some parent student loans money is disbursed to the student directly but the parent is informed before the disbursement process is done. If you don’t need the money you get from disbursement you can always cancel it.
In a nut shell, You as every parents will want your child to complete the education but you may not be able to support your child with his/her education expenses. That is when you look for parent student loans. If available, using your personal saving is the best reliable solution for your child’s education. However, if you don’t have savings you can go for loan and whenever you want to get the parent student loans, choosing the Federal Direct PLUS is advisable.