Three Private Student Loan problems – and how to solve them | 03.11.10
We get a boatload of questions daily in our Financial Aid forums concerning private student loans. While such a loan can help you close the gap between your federal loan allowance and your total cost of education, there may be some concerns. Here are a sampling of questions found in our forums and some ways to answer them.
1. “My parents don’t want ANOTHER loan hanging over their heads.” – As you may have heard, the U.S. economy hasn’t exactly been great last couple of years. Virtually no outside lender will approve you for a private student loan without a cosigner. But Mom and Dad, already burdened by the cost of education, might feel queasy at the thought of borrowing even more and facing a potentially damaging interest rate. One way to solve this problem is to take out a Parent PLUS loan, which has a fixed interest rate of 8.5% and the payments can be deferred until after graduation.
2. “My parents have lousy credit.” – Again, you will almost definitely need a co-signer for a private student loan these days. One trick is to ask your parents to apply for the Parent PLUS loan. If they have bad credit, they will get denied. You, however, can become eligible for up to $6,000 more per year with an unsubsidized Stafford loan. You may also seek out another trusted adult as your guardian. (Read this checklist for finding a private student loan co-signer.)
3. “I don’t know which lender to trust.” - Sad to say, there are a LOT of shady lenders out there who would love nothing more than to sucker you into a bad loan. Always (repeat: ALWAYS) shop around and perform your due diligence before providing personal information to a lender. One great place to start is right here, with the Private Student Loan comparison tool.
ScholarshipPoints code: PSLPROBLEMS
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thanks for the information cuz I’m about to start applying for loans soon
Being an independent student I hope I can qualify.
pretty basic but the Parent PLUS loan info is useful :]
Really helpful! I shall look into Parent PLUS and unsubsidized Stafford loans :]
Good information.
thanks goodness i read this before I started to get a loan from a shady place…
This information was very helpful. Thank you!
so helpful. thanks!
I remember talking with my Admissions Counselor about this information, but this is so much simpler.
thanks a bunch
Thank you for the information. I have never thought much about student loans before.
Excellent information
I can use this information!
Thank you for the information. It is a good thing that you are encouraging us to what is out there, consequences/possibilities that might pop up. Thanks!!!
With my credit and already being in so much debt i find it hard to try and get a student loan to get the rest of my education. How is it possible to get a low interest rate and be able to pay it back if you are already knee deep in expenses that cant be helped??
I have searched alot and still cant find a salution to this common tail. especially now when the economy is struggling so much.
Very helpful info. I will have my dad check into the Parent PLUS loan.
if it wasnt for all the information you give us i will be so confused thanks