student loans
My daughter needs to take out student loans beginning next school year. She will need about 80,000 total in loans. I was advised by a Kaplan lawyer that since I am a teacher, I should take out a parent plus loan so that I could then apply for student loan forgiveness when it’s time to pay it back. Would you agree? If not, do you have any advice on which company she should try to get a loan from?
Thank you!
Terry Says
Rae and I disagree about PLUS loans. They are the MOST expensive loans you can get! There are fees attached, and it is difficult to renegotiate. And the “out” is only after paying them down for years, the remaining balance may eventually qualify for forgiveness.
But private student loans give you no “out”. And they are difficult to refinance unless you can replace this entire borrowing with another personal loan at a lower rate.
I much prefer a home equity loan, although the interest on a loan taken out for this purpose is not deductible. And rates are rising. So maybe it’s better to refinance your home at a fixed rate — higher today than last year, but probably lower than in the future if inflation keeps climbing.
Is this estimate for $20,000/year in student loans — AFTER qualifying for Federal student loans?? That may be more manageable.
But has she considered living at home and thus paying less for college, or attending a local college where credits will transfer for her last two years? And has she gone to www.Scholarships.com to see if there is any free money available?
Have you talked to the admissions office and told them she wants to attend, but the family just can’t afford it? Maybe the will come up with more money, or a work/study program. She could be a dorm advisor and qualify for free room and board?
Explore all avenues for raising money — because it’s not just the initial borrowing cost, but the impact of the interest rates over the life of the loan that are so devastating ultimately.
