Ask Terry Questions College for two kids

College for two kids

By Terry Savage on July 12, 2020 | College Savings / Student Loans

What is the best option for a college loan? We have a junior in college and a senior in high school. We took out $7000 in a parent plus loan but can pay that off in its entirety now. (I’m waiting until they resume the interest) for future loans, what should we do? I’m leaning towards having our daughters take out student loans and helping them pay those off. Thanks in advance!!

Terry Says

OK. Parent Plus loans are the WORST college deal ever! Not only are the rates high, but he “origination fee” makes them really costly. Glad you are paying this off!

First step is to take a look at colleges and costs. This is the perfect time to level with your younger child that you don’t have enough money fora prestige, far-away school. Get him/her to set their sights on lower cost colleges, maybe the first two years at a community college — especially since the campus experience in the next two years won’t be that great anyway! A great ally in this process is your high school guidance officer, who might tell you which schools could offer the most financial aid, and lowest net costs.

For your student already in college, this is the time to contact the financial aid office — especially if your income has been reduced by the pandemic. Beyond federal student loans (which pay only a small portion of college costs — only $K7500/year for college juniors) — you may find the college more willing to negotiate tuition or additional financial support. For the first time families have a bit more leverage as colleges worry about filling dorms and classrooms this fall.

Also, you need to start doing some more research about college costs, studentloans and the total cost of repayment. Spend some time at to understand how the process works. As noted above, even Federal student loans with new low rate of 2.75% for 2020-21 school year, won’t cover the cost of college.
Go to and see if there is anything your high school senior can do now to qualify for one of the many free grants available every year.

I see you have taken out loans before this. So you probably filled out the FAFSA form. YOu’ll qualify for more aid when you have two students in college at the same time. The form for the next year starts on October 1st — so be prepared. (More on that at Finaid.)

And finally, the cheapest money outside of Federal student loans will be a mortgage on your home. The interest on the portion used to pay for college won’t be tax-deductible, but the rate will be low. Plan ahead, because refinancings are jamming the system to get the low rates.

Last thought — college WILL be worth it — so get organized now!

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