<p>You cannot take out loans through PLUS. A parent has to take out those loans. They are not automatic and if the parent has 90 day late info on the credit report, the loan will be denied. The loans accrue at about 7% interest immediately upon disbursement. Each year, there has to be a new application and the prior year acceptance means nothing. No guarantee each year, and yes, it happens that a parent can be denied at any time. Still the loan has fairly flexible repayment plans and are forgiven upon the parent’s or your death. Only the signing parent will have those loans on his/her credit report, not you.</p>
<p>Now those other loans that you can get with a qualified cosigner are a whole other thing. The loan terms are not as flexible, and the interest rate will depend upon your parent’s credit. Both you and the parent will be held responsible, and no, you can’t get the parent off the hook later. The lender has you both and if anything happens to one of you, the other still has to pay, and it all goes on both of your credit reports. Bear in mind that a number of jobs, particularly in financial markets will require a credit check and a lot of positions are leery about hiring anyone in a whole lot of debt. For some reason, such people are more likely to get desperate and do things like steal. Your parent’s credit will also be affected with the loans on there if they want to buy a condo, move, start a business, go into a nice assisted care place. You had better get life insurance too, since if anything happens to you, your parent has the bitter pill of still paying off your school loan. </p>
<p>So do the math. If you and your parents really think it’s worth the differential, go to it. Some people do. You can’t do it alone; you need your parents to put that money down on you and take that risk. And you are also risking their security and old age, make no mistake of it. </p>
<p>Close friend has a DD at USC. Loves it, they can afford it, but man, it still hurts to pay that bill. And even though they can pay that cost, they are finding that their DD feels mighty poor there as a lot of the company she keep are truly well to do, and keeping up with that is not an option for her. She did not get into UCLA. </p>
<p>I’m paying a premium for my kid at an OOS school of his choice but it’s within the amount we feel we could pay. A private school at full price like USC, was not in the picture. </p>
<p>If you want to go to grad school or prof school, it will be on your dime and if you are not all loaned up, the interest rate is more favorable, stipends are possible, and you can check out USC then without involving your parents. But not if you are up to your neck with UG loans. You are being immediate and shortsighted because this is in front of your face now. Look to the long term. Again, if you really feel this is worth it and your parents agree and you feel it’s worth those risks to them, it could be a go. </p>