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How to Get a Loan for College with Help From A Parent

Guest Post | May 31, 2022

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So you have your acceptance letter and are pouring over the class directory looking at the different things you can learn and need to learn for that diploma. You can picture your dorm room and roommate, even some of the fights you’ll likely have. Even the lunches in the cafeteria are vivid in your mind.

The one thing that is a little hazy is how you plan on paying for all of it. With so many types of options, scholarships, and grants, how are you supposed to navigate it all? If you’re American, your top choice is loans. For those of us whose parents make too much money to qualify for federal student loans (information available at this link) and scholarships, but not enough to pay for college flat out, there are a few options that are still available with the help of your parents.

What is a Parent College Loan?

Quite simply, a parent college loan is a loan that parents can take out for their child or children that will help pay for college. The amount can vary from lender to lender, and some may be enough to cover the entirety of your college expenses. The biggest difference between a parent college loan and a loan co-signed by your parents is your parents are entirely responsible for paying back the loan as their name is on the paperwork.

This means that should you fail out, drop out, or discontinue school for any reason, your parents will be responsible for paying back the loan. The conclusion I am sure they’re hoping for is paying back the loan of their college graduate or, more hopefully, their college graduate can help them pay it back when they find a job in their chosen field.

The Search Before the Loans

Firstly, you should look into the various scholarships your school, county, and state offer students in your area. If you think it may be too late to get scholarships, you might be surprised to find a few here or there that have had few or no one applied for. With scholarships dwindling, another possibility is granted through the government or your college directly. NerdWallet makes a good point when they put private loans as their last idea to pay for college (https://www.nerdwallet.com/article/loans/student-loans/how-to-pay-for-college). Before taking out loans with crazy interest rates, found out about the student work program at your school. Some schools will pay a student throughout the semester for putting in a few hours at their library, cafeteria, or working as an aid in one of the offices on campus.

Once you have gone through all other possibilities, then search for loans you or your parents can take out. While it may seem like a daunting task, paying for college is possible, and if you want to continue your education after high school, a necessity.

A Further Look Into Loans

College students - How to Get a Loan for College with Help From A Parent

Now that you have made sure to exhaust all resources in the search of how to pay for college, let us talk specifically about Parent Plus Loans versus private loans. Both loans are credited to pay for the cost of education and any additional expenses the student accrues while they are in college for the semester. The one downside to loans is you may have to continue to borrow money if you are unable to stretch your savings or the loan into further semesters.

Parent Plus Loans are loans granted to the parent of the student seeking to further their education. Your parents will be the primary borrower and will put down their information rather than yours, though it will still require your FAFSA information. If you already sought government grants, you should already have the FAFSA filled out. With that information, your parents can fill out the forms online via the Federal Student Aid website.

Private college parent loans are through private lenders, including banks. These institutions should be looked into thoroughly before your parents or any lender borrows money from them. There are many websites available to compare interest rates and payment options of various lenders and finding the best loan that will be easy to pay off is key to being able to pay off the loan quickly. While the Parent Plus Loan through the government is simpler to find, you may be able to find cheaper interest rates with a company that will still defer payment until your time in college has ended.

Final Thoughts

Going to college is an adventure. It can be the best years of your life and help guide you to the career you could spend the rest of your life in. This is a stepping stone in the direction of a bright future. Once you have figured out how to pay for college, soon enough you will be picking your classes, figuring out what major will help you live your best life, and picking bedding for your dorm.

Now you can feel more prepared to discuss payment options with your parents should this be the step to take. You have information on how to find out more and learn about different options available to you. Remember, loans may be daunting, but you will usually only have to worry about them after you are graduated and in a good-paying job. Congratulations and we hope you put your best foot forward into your future.

 


NCFA Jan 2018 resize - How to Get a Loan for College with Help From A ParentThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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