Ask Terry Questions Student Loans for my son

Student Loans for my son

By Terry Savage on June 08, 2015 | College Savings / Student Loans

My son is going to be a Sophomore in college. Freshman year FAFSA provided a small Un-Subsidized loan opportunity. I have three younger children and have saved modestly for them all. I’m tapped out for my oldest after sophomore year and now need to consider a loan. Home equity a good place to go? I don’t think he’ll get enough, even un-subsidized.

Terry Says:   Gosh, I hate to see you do that — especially with four children to educate.  Home equity loans are notoriously volatile.  By definition, interest rates fluctuate — and from here they are likely to rise when the Fed increases rates.  And, most home equity loans require interest-only payments — leaving you with a huge amount to repay, or refinance, later at higher rates.  And that will mess up your own financial future.  You know what they say on a plane about putting your oxygen mask on first, before helping others!

I’ve often said that students should be told well in advance that they must live at home and attend community college for the first two years, and perhaps work part-time to save money.   It’s a little late to pull that on your first born — but to be fair you should let the others know that you are not able to provide college funding.

They need to look at less expensive alternatives — OR start searching for scholarships in their junior year.  There are two good places to start: and  But to be honest, unless they are great at a sport, or exceedingly good in school, it is unlikely they will find enough money to fund a four-year program away from home.

I think you need to contact your son’s college financial aid office NOW, and let them know he may not be able to enroll in the fall unless they are able to provide more financial assistance.  But since you must have filed the FAFSA to get even the small amount of aid you received, it means that you weren’t able to demonstrate enough “need” based on your family’s income.  So I’m not very hopeful that they will provide more– but it’s certainly worth asking.  Don’t procrastinate!

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