Tips on Borrowing Money for your Kid's College Degree

So you got your kid into college – and it’s a great college – and the financial reality smacks you in the head when you get your first college bill.  Yikes!  Unless you have the funds to pay for your child’s college safely tucked away under your mattress, you’re going to need money fast. 

Be careful when looking at loans.  They’re not all the same and the rules have changed.  Check out many options before signing any contracts.  I read this great article in Money Magazine (August 2017).

Federal Plus Loans (fixed APR: 8%)
Plus loans are the easiest to get – even with bad credit (except bankruptcy).  Be careful how much you actually borrow because it’s easy to take more than you really need and then set yourself up for difficulty in repaying the loan later.

Private Loans (fixed APR: starting at 5.4% and up)
Private loan lenders seek clients with good credit history.  So if you have excellent credit, you’ll probably get a great deal at a low APR.  But if your credit is less than stellar, you may end up paying upwards of 12%!  Yikes!

Home Equity (fixed APR: starting at 5.4% and up)
By using your home (that you own) as collateral, you can qualify for good loans at low APR.  But, be careful of hidden costs – make sure your quotes include all costs such as appraisal fees.  Because your home is probably one of your biggest investments, make sure you have enough funds to cover your retirement, kids’ weddings, and other expenses in the future.

Remember, education loans are almost impossible to escape – even in bankruptcy – so only borrow what you actually need.  

Got Student Loans? Watch Out For Scammers!

What kind of people (or companies) prey on college students? Despicable people.

With student loans for college tuition as high as $250,000 for a bachelor’s degree, most students struggle with paying back their debt after college graduation.  So, many desperate students have become victims of scammers who promise to consolidate, reduce, or eliminate college debt.

What most people don’t know is that their loan service companies offer the same services to consolidate their loans and work with you to find a payment system that fits your budget, especially if you’re not working after graduation.  And your loan companies don’t charge a fee! The scammers use high-pressure sales techniques and charge $600 to $1,200 to guarantee results.  Then, the borrowers pay the scammers directly (bad idea!), and you guessed it, the scammers leave town with the money, leaving the borrower in even worse financial shape.

Be careful.  These scammers create websites that look like your loan company’s. They even use the Department of Education’s logos for endorsement.  Don’t be fooled! The federal government has programs that help you consolidate your debt, organize repayment plans, and even forgive loans depending on your situation.  It’s all based on your income and your career path.  If you aren’t working after graduation or you’re working in medicine, education, or other fields that need more people, you might be able to find loan forgiveness programs to reduce or eliminate your debt.

Contact certified student loan counselors at or check out your options at

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