Ask Terry Questions College loans for this fall

College loans for this fall

By Terry Savage on May 19, 2019 | College Savings / Student Loans

Hi Terry, my daughter has been accepted to Indiana University. We have 20,000 saved. We will have to borrow around 22,000 . Do you have any advice for us on best loan options? Always have appreciated your directness. Thanks

Terry Says

Sorry for the delay in responding.  I’ve been a bit swamped with questions  Just take a look at my most recent article on the cost of student loans and current interest rates. There are NO good options –and at this point you don’t want to dash her expectations by suggesting she live at home and attend community college for two years!

Parent PLUS loans are your best choice —  but they will carry a hefty 7.08 percent rate, along with an origination fee.  You could take out a home equity loan but that carries exposure to higher floating rates — and you can no longer deduct the interest unless the money is used to improve your home. (Seems the government is really conspiring against educating our children!)

Your daughter should be scouring to see if she qualifies for any extra “free money” — though for the school year that begins fall 2019, most of those scholarships have already been given out.  They have spring deadlines — but it’s not too late to search for next year.

And you and your wife should consider the impact of this debt (plus interest)on your own retirement plans — perhaps taking a weekend job now to pay down those loans as soon as possible.



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