Filling the void when funding is not enough
LANSING, Mich. (WILX) — Student grants and loans can cover a lot of college costs, but they’re often not enough.
When it comes time to go to college, experts say it’s important to make sure you and your teen exhaust all forms of scholarships, grants, aids and professional studies before turn to student loans.
Cherry Dale, a financial coach at Virginia Credit Union, said you’re likely going to face a funding shortfall because even federal student loans won’t pay the full cost.
“Your student may qualify for student loans and his name only pays in many cases,” Dale said. “Especially if you’re looking at a four-year college in-state or even out-of-state, you’ll be costing more than your student can borrow. “
She said turning to private student loans should be a last resort because they come with higher interest rates and are more expensive overall than federal student loans.
They also usually need a co-signer who puts an additional person on the hook – likely a parent.
If you want to help your child close that funding gap, there are personal loans, home equity loans, savings accounts and 529 plans. Dale said you could also consider Parent PLUS Loans.
One of the biggest differences between Parent PLUS and other student loans is that it requires a credit check. But to be eligible, your child must complete the FAFSA.
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