Student Loans for Parents

Another less advantageous method of paying for college is to take our a student loan for parents. These are called PLUS loans and allow parents to borrow the entire cost of an undergraduate education including tuition, room and board, supplies, lab fees and any other costs not covered by any other aid in the form of scholarships and grants the student may qualify for. Additionally, these loans do not require collateral as a home equity loan would. So you don't have to worry about putting up the house to pay for college. Lastly, PLUS loans can be consolidated under a variety of repayment plans with a fixed interest rate for the life of the loan, and low monthly payments.

Student Loans

Student loans are similar to the PLUS loans with the exception that they are given to the student and not the parent. The interest rates are usually a little lower than the PLUS loans, but the responsibility of repayment lies with the student and not the parent. The benefit of student loans over PLUS loans, is that some of the loan is subsidized, which means interest does not accrue until the student drops below half time or finishes school. It is also guaranteed that the student will qualify for a student loan.

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