Let’s talk business. Do you know everything about college loans? If you don’t, we are here to help you. First of all, to qualify for a college loan, you must file the Free Application for Federal Student Aid (FAFSA). Some parents worry that if they file this application, some schools will reject their child’s application. So bear in mind that private schools routinely favor high-income students because they don’t have the financial need that many applicants possess. So you can file the FAFSA after your kid has been accepted to school.
Never lie on this document. Anyway, it’s unlikely that a student, even if eligible, would receive need-based aid after pulling that trick. The kind of loan you’ll get is called the federal Direct Loan. Undergrads can borrow a limited amount of money $27,000 for the whole 4 years. However, they can borrow more if their parents are turned down when applying for the PLUS Loan, which is the federal loan for parents.
The PLUS Loan allows a parent to borrow enough to cover the gap between the cost of the school and a child’s financial aid package. Parents, calculate ahead what is safe to borrow! For those with good credit history, you can try private college loans. The interest rate depends in fact on the credit history. These loans have no special requirements.