As August comes to close, most college students have already made it to the dorms in preparation for the new year. Perhaps you’ve already secured all the funding you needed. This most likely includes some type of student loan. Paying for college is a giant headache. What you don’t know about student loans can set your child back after they graduate.
There are numerous stories of people who lost out on work because they couldn’t pay their loans. Licenses were stripped and years of hard work went down the drain. It may be an easy decision to help your kid get into the college of his or her dreams, but there are numerous challenges they will face.
Therefore, let’s take a look at several aspects of student loans you may not know.
1) Co-Signers Are on the Hook for Student Loans
It’s an easy decision for parents to do whatever it takes to help their child get into a good school. Many even feel the need to co-sign the loan. Parents should know the massive risk that comes with that. If your child cannot find work after graduating, you are making the payments. You can be sure that the lenders will be coming after you for repayment.
Another tragic story involved the Mason family. Steve and Darnelle Mason’s daughter Lisa dreamed of going to nursing school, so they cosigned a $100,000 private loan. At the age of 27, she died of sudden onset liver failure. Tragically, the lenders went after Steve and Darnelle to pay back what became $200,000 worth of student loan debt, late fees, and interest.
2) Look for Free Money First
Depending on how much money you make, there are tons of grants and scholarships out there. Some aren’t so easy to find, but they do exist. You can find a grant for just about anything these days. Any amount of money you can get to help offset the cost of college is worth the time spend researching and applying.
Also: http://financialhelpers.com/student-loan-debt-is-hurting-the-economy/
You can find grants and scholarships based on religious affiliation, ethnicity, student achievement, financial status, and so much more. The best way to find them is to get those fingers going and search the internet.
3) Set Out a Plan Ahead of Time for Paying Back Student Loans
Here’s one most people don’t think to do. You have no idea what the economic climate will be 4-7 years down the road. The best way to conquer the burden of debt is by being smart and prepared. There are several government programs and institutions that offer student loan forgiveness. Financial Helpers is one such company who is willing to work with you.
The best way to prepare for that day is to work on improving your child’s credit as they go through school. Get a credit card, teach them about fiscal responsibility, and save money. As their credit score improves, they can later refinance their loans.
4) Start Saving ASAP
The best advice is to start saving money for college as soon as they’re born. For those of you whose children are already entering college, it’s a bit too late for this step. But for everyone else looking to be prepared, there are state prepared college accounts you can pay into and use the power of compound interest.
This step not only takes away the student loan equation, but also the additional money paid into interest. Instead, you can use interest for your benefit and not the bank’s. There are other tax benefits as well. Do your research and be prepared!
