One question we get asked frequently from students in our financial aid forums is what to do when their parents’ income makes them ineligible for a federal Stafford loan. Many people are surprised to learn that if your parents make around $50,000 or more, or have particularly strong savings, they might earn too much to receive the need-based subsidized Stafford loans.
Fortunately, there are still a couple of federal-based options you can look into.
1. Unsubsidized Stafford loans. Among the best options for a non-need based loan, an unsubsidized loan from the government can go a long way in covering some of your tuition. One downside is the interest begins to accrue immediately upon disbursement.
2. Parent PLUS loans. PLUS loans (Parent Loans for Undergraduate Students) are loans are taken out by the parent in his or her name. The payments on these loans start right away and are not deferred if the child is still in school. These are a good way for a parent to still have a large say in the payment of their child’s education.
You also have the option to take out a private student loan. Like a subsidized Stafford loan, these loans needn’t be repaid until after graduation. Private student loans are, however, based on credit, not need.
ScholarshipPoints code: PARENT0310
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