How Parents Can Borrow Wisely and Close the College Funding Gap
Your child has chosen a university, enrolled in first-year orientation, and now comes the next hurdle: paying the tuition bill.
According to a survey conducted by College Ave Student Loans, 74% of parents surveyed found the cost of a college education to be surprisingly high. Between tuition, room and board, and other expenses, many families have a funding shortfall, even with the help of scholarships and grants.
If you’re wondering how you’ll fund your child’s education, check out these funding options to cover remaining college expenses before they start school this fall.
When Savings Are Not Enough
According to the survey, 95% of parents help or plan to help their child pay for their education. How do they plan to pay the cost? About 59% plan to use their income and savings to help cover some of the remaining costs after grants and scholarships.
Some (43%) will use 529 college savings accounts to help pay for their education, but with rising tuition, room and board, many families are still missing out. Some parents are considering taking a second job and some are considering using their retirement account or expecting their child to contribute.
How to quickly close the financial gap
While it is noble for parents to want to help their children, they do not need to give up their future to help their child build theirs. One of the easiest ways to close the college funding gap right away is to borrow to help pay for college. Paying for college and saving for retirement can be stressful, but you can balance these two needs by borrowing responsibly.
Although you may have avoided taking out a loan in the past for fear that you or your child would go into debt, many loans have multiple repayment options.
“Applying for a student loan can be scary, but it doesn’t have to be difficult,” said financial expert Mark Kantrowitz. “Student loans are a tool to help parents give their children a bright future.”
By now, your family should have completed their Free Application for Federal Student Aid (FAFSA). This not only allows your student to obtain scholarships and grants, but also gives them access to federal student loans, which they can take out in their own name at a low fixed rate. If you need to borrow, federal student loans in the student’s name should be taken out first because they offer unique benefits and protections not offered by private lenders.
If you still find you have a gap to fill, private student loans are an option worth exploring. Before helping your child get a private loan, research and find the best option for your family. A student loan calculator can help you estimate the cost of the loan and the potential monthly payment to find a repayment plan that’s right for your specific financial situation.
College Ave student loans can help you breathe easy and stress less. The application process takes less than three minutes, and customer service is ready to answer any questions you have about the process. Private student loans have several repayment options and offer competitive interest rates.
For more information and advice on financing your child’s college education, visit: CollegeAve.com.