Funding Options Beyond Federal Student and Parent Loans
It is critical for families to make informed decisions about managing college costs. It all starts by understanding your options. Talk with the financial aid professionals at the school you will be attending. Aid administrators are focused on helping families understand the financial aid and funding process. Until then, here are the highlights of various options beyond the federal student loan program.
Tuition Payment Plans
- No interest payments
- Typically payments are divided over 8 - 12 months
- Helps to limit the need for borrowing by allowing families to pay college costs from current income
- Enrollment fee
- The school’s financial aid office or bursar provides information about payment plans
Home Equity Line of Credit (HELOC)
- Revolving credit line that is backed by the portion of the home value that the borrower owns outright
- Interest rates are most often variable and payments will vary depending on the interest rate and amount owed
- Carefully read as certain fees may apply
- Interest may be tax deductible - See http://www.irs.gov for more information
Home Equity Loan
- A one-time lump sum loan based on the amount of equity a homeowner has in the property
- Usually features a fixed rate, payment and term
- Do your research as certain fees may apply
- Interest may be tax deductible - See http://www.irs.gov for more information
Private Student Loans
- Loan is made in the student’s name
- Often there are deferred payments while in-school
- May require a creditworthy co-signer
- Applicant must understand rates, terms, repayment options, annual limits, and bank fees
- Usually based on LIBOR or PRIME rates (common financial indexes, which are often used as base rates in lending)
- Utilize private student loan comparison sites to do your research
