Three approaches to college loans
Paying for college is a big step for anyone. If you’re considering taking on a student loan, you’ll need to decide whether you should shoulder the whole amount, have your child take the responsibility or share the weight together. Take a closer look at the pros and cons of each scenario.
Key takeaways
- Understand and evaluate the different ways to handle student debt.
- Weigh the options of having your child take on more debt or borrowing the money yourself.
- Consider the benefits and responsibilities that come with sharing these important financial decisions.
Before you borrow
Before you decide to take on debt, consider a few ways to lower college costs.
Open or add to a 529 education savings plan
Even if your child has only a few years until college starts, you can still make a dent in his tuition or progress toward paying for his books, meal plans or other college expenses. Every little bit helps, and a 529 savings plan is more flexible than you might think.
Search for scholarships
There may be money available from your community or for your child's intended major. He can help you research and may even learn about scholarships you didn’t know existed — older friends and siblings can be a great resource.
Work for it
Your child can look into the possibility of working part-time to help pay for tuition. Many schools offer work-study jobs to students with financial need. And contributing from his own paycheck may make your child feel more responsible about budgeting.
Explore your options
Research the actual cost of different schools and plan accordingly. Don't forget about the option to spend a couple of years at a reasonably priced community college before transferring to a four-year university.
Ask for more
Contact the college your child has chosen and ask if it’s possible to add more to the financial package they’ve offered. Colleges will sometimes increase aid if parents have less money than it appears on their application. A college also might bump up the aid if your child has a better offer from a different school. It never hurts to ask.
Once you and your child have a realistic idea of how much college will cost, it’s time to decide how to take on the loans and who will be responsible for repaying them.
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