Where’s the Money?

Parents and students find themselves in a pickle once they receive acceptance notices from a university and wonder how they will come up with the difference between what they saved and what they are expected to pay. For incoming freshman, university scholarships may be limited to honor students or for need-based students of a certain race leaving you to find other means. A work-study grant program funded by the university can help. For returning students, the university may have foundation grants tied to GPA and majors. For those who face no choice but to borrow, where else can they find low-cost alternatives to Federal loans? Unless one has a grave financial need, federal non-subsidized Stafford student loans are not cheap (currently 6.8% plus 1% fee). Depending on your parents associations the student may qualify for zero interest non-profit and charity college loans. Parents can do an internet search for for-profit “alternative student loans” for your state and university and find options like Sallie Mae and WellsFargo offering lower rates (simpletuition.com). There is the local Credit Union. Parents have choices of co-signing, variable (don’t recommend) or fixed rates or starting or deferring payments until graduation. For parents with ample equity in their homes and a good FICO score, a HELOC may be an option. As it is with any loan, it is important to fully understand the terms of the loan so that a clear comparison can be made between options.

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