Private Student Loan Options for Parents
Today the government grant and loan programs for students are making it possible for more students to achieve their dreams of a college education. Even though they require some time spent filling out forms, chasing tax records, and finding this number or that proof, they have made dreams come true for many. These low interest, no-fee loans also offer the student a six month grace period to begin making payments on these loans.
However, what if these loans aren’t enough to pay all the educational expenses? There are limits to the Perkins Loan and the Stafford Loan (which are different for subsidized and unsubsidized loans). While these limits are okay for the majority of the student education expenses, there are often gaps in need and coverage. For this, many students turn to private student loans. There are also some great private loans for parents as well, and these are sometimes easier to obtain since the parents usually have more of a credit history, are employed, and can fulfill more requirements for the loan.
Private student loans should be the gap fillers, and should only be used to supplement and fulfill what the government guaranteed loans do not.
NOTE: The following statements and opinions are made by content editors and are not the views or statements of respective companies. The Sallie Mae private loans have great interest rates, are tax deductible, and are flexible in payment options. There are several different Sallie Mae loan products for parents; here is a rundown on those loans and how they can help you.
Signature Student Loans
This is a student loan that provides for a cosigner. Students who are attending an approved community or four-year college at least half time towards a degree are eligible under certain conditions. The cosigner increases chances of approval, there are no employment requirements or origination fees for the student, and overseas programs are approved with certain restrictions. Like the Stafford and Perkins programs, you are not responsible for repayment until you are out of school or graduate.
The total loan limits are $50,000 for community colleges, $100,000 for undergrads at four- or five-year colleges, $150,000 for grad students, and $220,000 for grad students in health studies.
The Tuition Answer Loan
This is another cosigner loan, and requires that the borrower and student are U.S> citizens or permanent residents. The borrower (likely the parent) must have good credit, and the student enrolled half time or full time in an approved school.
You can borrow between $1,500 and $40,000 per year, and interest may be tax deductible depending on circumstances. One of the best things about this loan is there are no deadlines or federal application forms. The total limit of this loan is $130,000. One thing to remember is that this loan is provided at the prime rate and there will be an additional margin depending on the credit history or cosigner. You can defer payment until after graduation, but this will cause higher fees. You can also pay interest only while the student is in school, or make standard payments as soon as the loan is taken out.
