Borrowing Money Over and Above Stafford Loans

Paying for College
1

<p>It looks like I'm going to have to borrow approx. $23,000/yr* for 5 yrs in order to attend my dream school. Maybe a little less b/c I'll have about $3K saved by Sept. and my mom will possibly be able to contribute some. Some (hoped for) scholarship $$ will help, too.</p>

<p>*This is in addition to the Stafford Loan ($5,500) that I was awarded.</p>

<p>My 5 years of study WILL include 3 co-ops, that are supposed to be pretty decent-paying ones. I'm thinking (hoping) that the money I earn will help keep my loan expenses down.</p>

<p>SO-- where does an 18 y/o go to borrow $20K? A local bank, credit union? A bank that the college recommends?</p>

2

<p>If your mom’s willing, a Parent PLUS loan would be the easier, more favorable route to go - fixed interest, easier qualifications, better repayment terms. If you’re really sure you want to go with a private loan make sure you do your research and ask for help from a financially savvy adult. Finaid.org maintains a list of private SL lenders and has a comparative chart here:
[FinAid</a> | Loans | Private Student Loans](<a href=“Your Guide for College Financial Aid - Finaid”>Private Student Loans - Finaid)</p>

<p>A good place to learn about private loans and how they work is:
<a href=“http://www.studentloanborrowerassistance.org/uploads/File/Report_PrivateLoans.pdf[/url]”>http://www.studentloanborrowerassistance.org/uploads/File/Report_PrivateLoans.pdf&lt;/a&gt;&lt;/p&gt;

3

<p>It is likely you will need a cosigner to get any private loans. That means someone with a good credit rating who is willing to be stuck with the loans if you do not pay them.</p>

<p>Before you take out such an enormous debt load (which I would very strongly discourage my own kids from doing), please take the time to run the numbers through the loan calculator here</p>

<p>[FinAid</a> | Calculators | Loan Calculator](<a href=“Your Guide for College Financial Aid - Finaid”>Loan Payment Calculator - Finaid)</p>

<p>to get an idea of the repayments you will have once you graduate. Don’t forget to take into account that if you are unable to pay the interest as you go it will be accumulating and you will owe interest on the interest. At $28,500 a year for 4 years with a 6.8% interest rate your debt will have grown to over $130,000 by the time you graduate which will mean repayments of @ $1500 a month every month for 10 years..</p>