Parent Plus Loan or Sallie Mae Loan as a co-signer?

We have a gap with what needs to be paid. Is it better to take the parent plus or Sallie Mae in the students name that will be deferred until they graduate?

Who do you want to have the debt? The parent (then do the PLUS). The student (then cosigner).

Hoping it’s not a lot.

Both the Plus and the Sallie Mae can be deferred until graduation. Interest will accrue, but the payments can be deferred.

Run the numbers. The Plus loan has an origination fee, and the Sallie Mae might not. Interest will probably be higher on Sallie, but maybe not.

We are in the same boat right now. The Parent Plus loan is in your name and has a 4% origination fee as well. We are likely doing the private student loan and cosigning for our son. Check out Discover, Sallie Mae. Also, we plan on starting payments right away to keep interest from accruing.

No, it’s not a lot that we will need to borrow. I just didn’t know what route was best to meet the need. If there was a benefit with my daughter taking the loans in comparison with me taking the plus loan…

The benefit to a Plus Loan, rather than private, is that if you or your child dies, the loan is cancelled.

With a private co-signed loan, if your child dies, you STILL have to pay. And, if the parent dies, the loan must be paid off immediately. @ahill70 So, get life insurance for the amounts of the loan for parent and child.

Thank you!

^^
The insurance should also cover disability. If your child becomes disabled, you would want the loan paid off so that you’re not held.

@mom2collegekids Thank you, excellent point.

When you look at the gap amount to be borrowed, be sure to only look at direct billed costs from the school.

What is the tuition, fees, room, board. Subtract from that any scholarships or grants.

Amounts listed in COA for books, personal expenses are often estimated pretty high.
Books can be rented to save money, and student can get a summer job or campus job to help pay for some expenses.

Federal direct student loans should be exhausted before parent loans are taken.

The student can accept the loans the school offers, or decline/reduce them.

Are there loan options under Parents Plus to pay interest while in school? I’ll need loans to finish D’s Bs degree for her last year. We’ve never secured student loans except for the federal student loans. Now it apppears we’ll need a little extra for her final year but I’m at a loss as to what to choose from. I would like a loan and pay interest and refinance it with the house next year when she graduates.

I know the HESSAA NJCLASS loans have an option to pay interest only. Wondering if the Parents Plus with the FAFSA is also interest only until graduation.

Also, how do I go about getting loans? D will need small loans for Summer 2017, Fall 2017 and Spring 2018. Do I apply for 3 loans at different times of the year or apply for summer now and fall and spring in July??

@JerseyShoreMom is your D already done with this semester? Did she borrow the max of her student loans for this year?

Yes, you can start paying on the Plus loans immediately I believe, unless you request deferment. I am not sure if there is an option to only pay interest, there might be if you defer.

Summer probably depends if it’s part of 2016/17 school year, or not.

Then when she accepts aid for next school year she can let her school know that you want the Parent Plus.

How about a home equity line of credit?

We are out of the house still due to Hurricane Sandy. I don’t think I can refinance or get a HELOC because the house is being raised now.

She used all her student federal loans for the 2016/2017 year so I was looking for a small loan for summer classes and room/board. Since I am out of the house and living in a tiny 1 bedroom apartment with DH, it’s best if she stays at school and continues to take classes over the summer.

I think for now I will go with the NJCLASS loans because they offer interest payments only while in school. Once she graduates in May of next year, I will take the loan, refinance the house, and pay it off. Does that make sense?

You can pay interest only on the Plus loan. You would ask for a deferment until your daughter is out of school (otherwise full payments will start immediately, but the deferment is always granted) and then just pay the interest as it accrues, or any amount you can afford).

What’s up with Sallie Mae loans?

A mom on another forum claims that her 19yo DD got a $40k loan from SM w/o a cosigner. The DD has little/no income/no assets… Again, she’s 19 years old!

I know that about 10+ years ago, SM was approving huge student loans w/o cosigners but too many kids failed to pay the loans back, so a change was made to require cosigners for the bigger loans. (I think a student can get a very small loan (like maybe $5k) without a cosigner but at a higher rate.)

Is it likely the mom is wrong? When I went to the SM website, I saw that the whole thing is done online, including having the cosigner “sign.” Is it possible that the student took mom’s info (maybe from FAFSA app or whatever) and put her mom’s info in and faked her mom as a cosigner?

I’m just letting her keep her federal student loans and whatever loans need to be taken out during her last year I have agreed to have them in my name since I feel we didn’t save enough for her to go to college. Like her oldest DD, she will just have the federal student loans after graduation. She’s planning on a BS/MS and eventually a PhD so those loans will be in her name only. I’m done after the BS degree.

I’m going to try the Parents Plus Loan route and ask for a deferment and pay the interest on it as it comes.

I haven’t really looked at private loans, they all seem so much more involved paperwork-wise.

I had an old loan with Sallie Mae and they used electronic signatures…i.e. you typed in your name…

If you need the parent plus for summer 2017, and it is part of 2016/17 year, you might have to apply before the end if the semester.

Your D should also try to work in the summer.

D snagged a highly sought after $4k internship for 10 weeks over the summer, 4 days a week (they have Fridays off). The internship is in her field and the program and companies come to campus to work with her and/or pick her up and take them to the companies. She just told me yesterday that the summer housing on campus is reduced for this internship, so now it appears I need to borrow even less.

She also received an award for outstanding junior of the year so I’m curious when that would be applied, I assume it would be applied to Fall though.

I’m going to to with the Parent Plus Loan for the tuition only (she’s taking 2 classes this summer as well as the internship) for this summer and in July explore other loans for the Fall and Spring.