but when people suggested a HELOC or borrowing from a 401k you said you wouldn’t do that. How were we to know that? You didn’t say which school it is for, don’t want anyone looking at prior post, so we don’t have all the information needed to direct you to other borrowing sources. For example, the school may offer loans; Princeton, UVM, and others do. The state may offer loans. New Jersey does. Seems like you have only 2 options then:
1.PLUS loans which you apply for through the school. They have a 7% rate and a 4.3% origination fee. There are some benefit that private loans might not have like forgiveness of debt if the student or parent dies, ability to consolidate loans from multiple years into one payment, easy to qualify for in future years.
2.Private banks or credit unions. They set their own terms based on your credit score and situation. The rates are going up because the fed has raised the prime rates. Usually no death benefit if either the parent or student dies. May have a lower interest rate or no origination fees. Unsecured loans are expensive and might be limited by federal or state law. A $25k unsecured law is a high amount.
The only option is to co-sign $120,000 in loans over to her. That’s the cost of most medical schools. Co-signing that kind of money is a very bad idea, and would potentially sink her career. It’s not uncommon. Also, when she has trouble making her payments, (and she will) the bank will go after you and seize your assets. That could include your house. In a previous life, I was a loan officer. Banks are shrewd and merciless. Better to hear it from me rather than try to read it in the cryptic fine print when they put sales pressure to sign the loan papers.
Are these 100k+ loans for the parents to pay back? Or are they loans for a musical theater major to pay back?
I know Folks who use Wells Fargo and Discover for college loans.
Be sure to take out insurance on you and your child to cover the Loans in case one of you were to die.
If your child were to die you’d have the additional pain of paying back a huge loan for a deceased child.
If you were to die and this is a cosigned Loan, the lender usually demand that the debt be paid in full immediately since the cosigner is no longer living.
Private student loan lenders are kinda like mortgage loan servicers. Can you guarantee any of them are better or worse? Will they continue to be so in the future? Is one person’s experience with a lender representative of all experiences? Will regulation of the private loan industry change? You ask the unanswerable …