"For years, parents have assisted their children in shouldering the increasingly high cost of college: co-signing private student loans, taking part in federal loan programs, and saving for years to contribute. Private student loan lenders have been offering parent loans as an alternative for several years. And now the country’s largest lender plans to enter the fray with its own version.
SLM Corp., also known as Sallie Mae, will rollout its own parent loan next month, the Wall Street Journal reports, in yet another example of how the so-called “bank of mom and dad” is becoming a viable and attractive option for financing higher eduction." …
https://consumerist.com/2016/03/29/sallie-mae-to-offer-increasingly-popular-parent-student-loans/
More: http://www.wsj.com/articles/squeeze-the-parents-new-student-loan-goes-straight-to-mom-and-dad-1459205216 (may need subscription)
YES! This is what we needed, even more ways to get a parental loan and go farther into debt…good times…good times.
If you have to borrow significant money for it, you can’t afford it.
NOOOOO!!!
And no, “bank of mom and dad” does not mean “parent loan”. And wasn’t Salie Mae’s loans part of the bankruptcy issues in 2008??
There are a number of reasons a parent who can afford to send a student to college may choose to use loans to do so. Having another loan option is a good thing. I just wish lenders would underwrite the loans appropriately - the same way they underwrite other signature loans.
They do underwrite for these. These are private student loans, and Sallie Mae is competing with Wells Fargo and Discover.
I’ve seen ads for SoFi on tv lately. As long as people understand what protections they are giving up by not taking the Plus loans, this might be a better option with no origination fee and lower interest rates.