<p>I just closed on a Wells Fargo Collegiate Loan at 3.5%. The loan is in my son’s name, but I co-signed, so it’s not much different than the Student Loan for Parents, which is at 4%. I guess having two fish on the hook (me and my son) is worth .5%.</p>
<p>There’s a .25% reduction once it’s in repayment (i.e. 6 months after he graduates) if payments are automatic plus there’s another .25% reduction for graduating. So, assuming no change in PRIME, that’s a 3% loan. And there’s no origination fee. Not bad.</p>
<p>Once the loan is disbursed, I can also set up any kind of monthly prepayment I want. I plan to pay interest only while he’s in school so that when he graduates, the outstanding loan is exactly what was borrowed. Then we can share the pain of repayment. :-)</p>
<p>One thing to be careful about - they ask for the “Enrollment Period” on the loan application. If you indicate the whole year and the school is on a quarter system, then 1/3 will get disbursed each quarter. We wanted it disbursed in the first quarter because we have other payment sources for the other quarters, so we had to go back and get the loan modified to indicate just the first quarter.</p>