<p>I'm currently trying to figure out how to pay for college. Most of the financial aid i received is in the form of a parent plus loan. Does anyone have experiences in dealing with these loans? i am planning on working to help my parents pay them back.</p>
<p>What specifically do you need to know about these loans? They are offered to parents in amount up to, but not exceeding, the annual cost of attendance at the school you’d attend. The interest rate (7-8%) is high and there is an origination fee for each loan advanced (your parents would take out new loans each year while they were still paying the old ones off). At the end of college, your parents could consolidate all the loans into one payment which they would pay until the whole thing, with interest, is discharged. If you were to die, the loans would be forgiven; there are also some provisions for hardship. </p>
<p>I’d say it’s risky for you to assume that you will be able to help your parents pay off these loans. You don’t know what kind of job you will be able to get and in theory, your parents could end up borrowing several years’ worth of your post-college salary. You’ll need your salary to survive and be independent from your parents. If you’re going to be paying loans at all, they should be in your own name so you get the credit for paying them off.</p>
<p>One rule of thumb often heard is that college should be financed by 1/3 current income, 1/3 savings, and 1/3 loans. So if your parents have to borrow more than 1/3 the total cost of four years of college, it may be too much of a financial burden for them.</p>
<p>How much loans will you be in after graduation? If you have to take out too many loans then explore cheaper options. Take a gap year and apply again if you have to.</p>
<p>How much is the Plus loans in your FA package this year?</p>
<p>How much fed direct loans are in your FA package this year?</p>
<p>What is your family’s EFC? Can they pay for that without loan?</p>
<p>How much does the school cost?</p>
<p>What other aid did you get?</p>
<p>What is your intended major/career?</p>
<p>how much do you think you’ll be earning after you graduate?</p>
<p>Also consider community college options.</p>