Private student loans vs Parents Plus?

Paying for College
1

<p>Hi everyone--</p>

<p>I will probably demonstrate my ignorance of this whole subject matter but here goes: Son going to in-state state school (OSU). I have his tuition covered this quarter, but cannot cover the housing/food contract, which is approximately double the tuition. Same is true for next (Spring quarter) except don't have the cash for tuition then, nor the housing. All told, the rest of this year he needs about $14K.</p>

<p>What is the best thing to do? Private student loan plus me to co-sign for the $14K, or what about Parent Plus loans? Should we get the whole amount now, or do 2 loan apps (in case I win the lottery)?</p>

<p>What are the advantages/disadvantages of the 2 loan types? What else am I missing?</p>

2

<p>Parent Plus usually has the best interest rate than ANY private</p>

3

<p>Don’t know which is better for you…one is a loan that the student is responsible for and one is for YOU.</p>

<p>Borrow for the school year.</p>

<p>What about next year and the year after? Are you going to end up with $60k or so in debt? If so, it may be better for your child to do 2 years at a CC and then transfer.</p>

4

<p>Thanks, you guys. Yes, mom2, there will be significant savings once we are out of the obligatory Freshman Dorm situation. It’s the housing/meal plan! And he should be less that $50K when it’s all said and done, but it’s pretty scary out there!</p>

<p>We have talked about the CC option, too, and it’s still available to him.</p>

5

<p>Is your son already taking out the max student loans? If not, he should…the rate is lower. Even if you pay them back for him, this may be a better way to go for at least 5500 for this year, 6500 for next year, and 7500 for the 2 years after that. Then do Plus for any shortfalls.</p>

6

<p>mom2, can you explain a little more about what you mean? I’m new to this and don’t understand. Can my dtr take out loans first, then we pick up the rest in parent plus? thanks in advance!</p>

7

<p>guitars - that is exactly what we did. Our sophomore twins have subsidized and unsubsidized loans and we have PPLus loans for the balance.</p>

8

<p>Have your son file the FAFSA which will make him eligible to take out Stafford loans. The amounts are those listed in Mom2CK’s post (#5)</p>

9

<p>*can you explain a little more about what you mean? I’m new to this and don’t understand. Can my dtr take out loans first, then we pick up the rest in parent plus? thanks in advance! *</p>

<p>Yes…submit FAFSA…indicate that your child will want loans and work-study (W-S is iffy)…then whatever is left, you can cover with a Plus loan (or whatever).</p>

<p>However, don’t feel that you have to borrow UP TO COA. COAs are often padded. No need to take out loans to pay for toothpaste and shampoo, right?</p>

10

<p>I see, thanks so much! I was under the impression that my dtr could not fill out the fafsa since she is not (and will not be) 18. Doesnt the parent info have to go into the fafsa? </p>

<p>thanks everyone for you great help</p>

11

<p>One aspect of PLUS loans vs. private that is notable is that if the student dies, the PLUS loan balance is forgiven. This is a pro if the two loans appear similar.</p>

<p>Your daughter completes the FAFSA as a dependent, and you add your parent information.</p>

12

<p>The FAFSA includes W2 information for parents and student.</p>