‘Tis the season… not THAT season, I mean student loan season.

I know this isn't a topic many families are happy to discuss, but if you need to borrow more money than your student can borrow through the federal Direct loans, it's important to make sure you get the best information to make an informed decision. 

 

While you won’t be able to finalize loans until you receive the final bill from your student’s school, there’s a lot you can do in terms of research right now. 

 

Let’s take a quick look at the key considerations when looking at loans!

 

There are a lot of factors that will impact your choice of a student loan, but there are four primary elements you should look at first. 

 

Once you make your first cuts using these criteria, you can move into other aspects of each loan.

 

Here are the big four elements to look for first:

·      Interest rate ranges and fees

·      Whether you can prequalify (get a personalized estimate without affecting your credit)

·      Whether – and when – cosigners can be released

·      What hardship options are available, including whether the loan is discharged in case of death or disability of the borrower

To cut down on your research, I've created a table that summarizes these factors for the major lenders - you can click on each lender to either get their detailed profile informaiton or go directly to their website. 

 

After the first cut, you can start comparing loans based on cost, repayment options, multi-year options, and more.

 

Most parents aren’t bankers, so you may wonder exactly how loans work and what causes banks to make lending and interest rate decisions. 

 

In a recent Facebook Live, we spoke to Pete Wylie, VP of In-School Lending at CommonBond. The topic was “Everything You Wanted to Know About Student Loans, But Didn’t Know What to Ask.” 

 

Here’s a quick summary of what we learned from Pete Wylie:

·      Remember that loan fees increase the price of a loan just as much as interest rates. Look at the whole picture when comparing

·      90% of student loans are federal student loans

·      Everyone who fills out the FAFSA, regardless of income, has access to at least $5,500 for their Freshman year.

·      There’s more flexibility in the loan system than you may think– if you make a mistake, you can cancel the loan with no penalty for 120 days after the first installment is released. You may also be able to work out a monthly payment plan with your student’s school.

·      It’s vital to look at the whole four years, not just the Freshman year, when it comes to filling funding gap. 

 

For more information about what Pete had to share, check out our summary of the conversation!