Here are 5 facts parents need to know about student loans in 2019. It’s important I start this blog by mentioning the drawbacks of private student loans that may include the interest is often variable, less flexible repayment options, the student may have to start making payments while they are still in school, there is a higher limit on lending. This will mean the student will be paying more interest, the loan will be dependent on the student’s credit score, and if the lender requires a co-signer, the student may be putting that person at financial risk.
- Never turn down a subsidized loan.
- Know the differences between subsidized and unsubsidized Federal loans.
- Borrow only what you need.
- Be clear in what you are signing.
- Shop around at local banks and credit unions to learn what they have to offer in private loans before utilizing any unsubsidized Federal Direct Stafford loan. Why? Friendly terms! Over the last 2-3 years, I have been learning from some of our clients that they have secured a private loan with a lower interest rate than a Federal loan. For example, I talked to a client recently that retained a private loan at a 3% rate.
If you need more advice about student loans, financial aid, FAFSA, CSS Profile or scholarships please don’t hesitate to contact our office. We offer a complimentary consultation to see if our service would be a fit and help your family reduce the out of pocket cost of college.
