How To Pay For College: A Family Guide

College education leads to higher income, job security, and great opportunities in life. But, it may take until age 34 for you to fully pay for college.

Plan for your child’s college as early as feasibly possible. Get a jump with these six possible ways.

Parents may want to consider private loans if they borrow above their contribution through their income and savings.

There are several federally sponsored loan programs for undergraduate students:

Stafford Loans are among the most common, desirable, and low-cost loans at fixed 2.75% interest rates offered directly to students rather than to parents.

There are the Direct Subsidized Loans and Direct Unsubsidized Loans. These loans are also available to graduate and professional degree students.

Direct Subsidized Loans are need-based loans to students who demonstrate the need for financial help to cover higher education costs.

The Unsubsidized Loans are different as they are not need-based. Still, you, not the government, are paying the interest cost, which accrues right away.

Direct PLUS (Parent Loans for Undergraduate Students) Loans are directed at parents, not students, and are not financially need-based.

These loans are at a higher rate of 6.28%, designed to supplement other sources of funds the students could obtain. These amounts are subject to a 4% origination fee of the loan amount.

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