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What you should know as a parent about student loans

July 26,2012 by: Dallas Browne

A 2008 study on college graduates showed the fact that 65% of those who choose a 4 year college program graduate from it having a debt of over $23,000. This is huge, especially when you are young and trying to find your first job. The first years are not going to bring you the salary that every young man and woman dreams of; as a result, many of them have a great education, but they also have financial problems. Luckily, a good decision making and a thorough research can help both students and their parents keep the debt to the minimum. This implies learning as much as possible about the student loans that can be made, regardless of the fact that you are the parent or the student.

As a parent trying to obtain a student loan, you should be aware of the fact that there are numerous types of loans that you can access. For example, the Stafford and Perkins loans are extremely popular. They are offered by the government under the form of money that have the role to cover all the student financial needs, including the meals and the living in another city. Those who are in dire financial circumstances are the ones who should access the Stafford and Perkins loans, as they have been designed for people with such problems. The interest rates for these loans are very loan, while the repayment will be made only after graduation.

The PARENT Plus loan is another type of popular loan for parent who are trying to offer their children the best education possible. This is another federal government type of loan, so the interest rate is also very low. However, there are some requirements that you have to meet in order to be suitable for the loan. For example, your child must be under 24 years old and the student has to be dependent. The parent has to be biological, adoptive or step parent; as a tutor, this loan is not suitable for you. In order to access this type of loan, the parent must contact the college or university’s financial aid office, as it is the place where help is offered regarding the paperwork. A disadvantage of this loan is represented by the fact that after you receive it, you have to start paying back within 60 days, so it is not the type of loan that has to be repaid only after the child graduates from college.

The Signature Student Loans represent another way in which a parent can provide for a child’s college. This type of loan is based on the student credit score, so your child has to be a great student in order to access the money. However, the parent is allowed to cosign for the loan, as when the child enters college, there is not enough credit established.

Luckily for parents, there are a few ways in which they can help their children go to college. It is important to offer your children such an opportunity, as it is the only way in which they can get a well-paid job.

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