Good debt
Student loans are considered good debt because they help students and parents pay for college at a significantly lower cost than other types of funding, and they carry specific borrower benefits that other forms of payment don’t have.
Federal Stafford Loans. When scholarships aren’t enough to pay for college, most families turn to Federal Stafford Loans. Stafford loans are among the smartest way to pay for college. Rates are at all-time lows, just 3.42%, which is significantly lower than other forms of consumer financing, and repayment is postponed until after graduation. There are no collateral or credit checks required, so just about every family is eligible.
Federal PLUS Loans. Under this program, parents can borrow up to 100% of the estimated total cost of education, less any financial aid awarded to the student. These loans are available throughout the year at record-low interest rates starting at 8.5%, plus you may be eligible for automatic-debit and on-time payment discounts that could lower your rate to 6.25%.
What’s more, interest on Federal PLUS Loans may be tax-deductible, there are no prepayment penalties, and these loans are eligible for consolidation for even lower monthly payments.
You can apply online for a Federal PLUS Loan or print an application in PDF format.
Private Student Loans. These unsecured, credit-based loans are available to help pay tuition and fees, living expenses, supplies, computers and other every day living expenses. Your child can apply on his own signature or you can co-sign for the loan. Either way, a private student loan offers significant advantages, including:
Generous borrowing limits up to the full cost of education, less any financial aid received
Deferred principal and interest while in school
Money-saving repayment options
Deferment and forbearance privileges
You can apply for a private education loan at any time, and there are no application fees, financial aid forms or school certifications required.
For more information about NextStudent, visit www.NextStudent.com.
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