If your child is going to attend college anytime soon, it is time to take action. It is never too early to start educating yourself about student loans. Most parents are as confused as their child when it comes to borrowing for college. Below are a few tidbits for you to consider:
- Federal versus private loans. If your child has received the maximum amount of federal loans available to him/her, private student loans can help with any shortfall. However, you must pay attention to all the terms of private loans and diligently research them to obtain the best terms possible. For example, ideally you want a loan that has competitive interest rates, does not charge loan application fees or origination fees, and no late fees.
- Borrow less than what is offered. Your child will be offered a certain amount of money in student loans, but you don’t have to agree to borrow the full amount. Only borrow what is absolutely necessary to pay for tuition, books and expenses directly related to obtaining an education. Your child should research scholarships and look for job opportunities to pay for living expenses and other costs.
- Compare interest rates. Many people focus on the monthly amount that will be paid when comparing student loans, but it is also important to compare the interest rates on loans. Is it a fixed or variable rate? Is interest deferred while your child is attending college? Remember, interest can accrue and significantly increase the amount of the loan that must be repaid.
- Cosigners. Most federal student loans do not require a cosigner, which means the student is the only party responsible for repaying the loan. Many private student loan lenders require a cosigner (which is typically a parent). If you agree to cosign your child’s loan, you are 100% responsible to pay the full amount of the loan if your child fails to pay it. Additionally, all activity on the student loan will impact your credit score.
Finally, start talking to your child about repaying their student loans while they are still in college. If possible, you could create a repayment plan whereby you match any payments your child makes on the student loans while still attending college. Your child must fully understand his/her liability and obligation for the student loan and what you are/are not willing to do when it comes to repaying it. Putting it all out there beforehand can save everyone in the long run.
Contact The “Milwaukee Bankruptcy Attorneys,” DeLadurantey Law Office. LLC. DeLadurantey Law Office focuses on student loan debt, Chapter 7 and 13 bankruptcy, debtor’s rights, debt negotiations, debt relief, mortgage loan modifications, and foreclosure defense. A “defender of the little guy, “DeLadurantey Law Office serves the following location – Milwaukee, South Milwaukee, West Milwaukee, Waukesha City, Waukesha Town, Kenosha, Racine, and all other municipalities in Milwaukee County, Waukesha County, Kenosha County, and Racine County. We can be contacted by phone: (414) 377-0518 and can be found on the Internet and on Facebook.