<p>There will be a gap between COA and aid for my son. The wife and I are committed to paying for the gap. Are there better options thant the ParentPlus? We will not be able to pay off each year annually - probably need a 10 year term.</p>
<p>Any other thoughts than P+?</p>
<p>If you are a homeowner, you should look into a Heloc. We are using our heloc to borrow about 7k for tuition for each semester and will make payments during the school year. We will hopefully end up about 3k - 5k short each year and will have to continue payments after grad until paid off. We are also able to write off the interest on this loan since our AGI is under the limit to allow this.</p>
<p>I used our heloc in the past to finance our car and had a fixed interest rate of 4.03%. When I pull out cash for tuition, I will probably just go with the current variable rate of 2.68%. Works for me, but YMMV.</p>
<p>A HELOC is a good idea as long as the rate remains reasonable. We chose to take out a mortgage at a low fixed rate- much better than the rate we would have gotten on any other federal loan available to us or to our 3 kids.</p>
<p>As a student, I have applied for a private student loan with one of my parents as a cosigner. The interest rate was less than the Parent Plus interest rate. No payments have to be made until 6 months after graduation, but obviously if you or the other parent will be contributing to the cost of education through a PLUS loan, you may want to consider the private student loan, and you or the other parent could make payments while the student is still in school.</p>
<p>We used a home equity line, variable rate, as per socaldad1.</p>
<p>It only worked for us because the amount we put on it each year was small and we knew for a fact that we could pay it off within a short time. We borrowed about 14K total for son’s undergrad that way and paid it off shortly after his graduation.
I would not at all feel comfortable using a variable rate for large sums if I felt I could not pay it off very quickly if rates rose.</p>
<p>If you can find a credit card with a low fixed purchase or balance transfer rate, you could put the tuition on that and pay the minimum payment until you are able to pay more. A benefit of this is that credit card debt is unsecured debt and can be discharged during bankruptcy. However, your credit score might be adversely impacted due to large amounts of unsecured debt.</p>
<p>^ In theory this would work however paying tuition via a credit card now comes with a 3% fee up front for most schools so I would watch this.</p>