Best Student loans and when do you take it?

Have few questions first time parent how the process for student loans works

  • Let’s say you want like 50% loan for college expenses and remaining comes from 529 plan

Don’t think we are qualified for Fafsa based loans not sure how to apply for them I think there is parent plus loans

When should we take student loan right now ? Does freshman get any advantage taking loan now or wait couple of years and take the loan ?

What’s best companies for loans ?
I keep seeing Discover or Sallie Mae loans

How do you compare parent plus loan Vs student loans which one is better ? Obviously don’t want to pay anything until student graduates and Son May plan to go graduate college

Every applicant who is a U.S. citizen and certain noncitizens are eligible for FAFSA-based loans. To apply for federal direct loans, the student and the parents - surprise - complete the FAFSA (Free Application for Federal Student Aid).

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If you know you are going to require loans, it’s best to first take the $5500 federal loan that every student is offered. I believe parent plus usually has higher interest rates than private, and are in the parent’s name. Private loan interest rates are based on credit score and income, can be in the student’s name with a co-signer, and can be transferred into the student’s name after graduation and employment. We start paying the interest immediately to get a lower rate and to lower the debt at the end. If you don’t take the $5500 freshman year, you can’t take it the following year (but can take the amount offered sophomore year). Students are offered $27,000 in total over 4 years.

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Sallie Mae, etc. doesn’t administer student loans directly. Student loans are administered through your college financial aid department. All students are eligible for subsidized loans totaling $27k for a 4 year degree. 6 months after you graduate, your loans are sold to a student loan servicer, (Sallie Mae) and you would get a bill for your first payment.

Loans are something to use only when you need them, so if you have cash to pay for some of your degree, it’s always best to use that first. Of course, make sure the school you choose is affordable.

A parent plus loan is a loan your parents can take out instead of you. They would assume the debt instead, because the loan would be in their name. That would be something to talk to your parents about. A traditional student loan would be in your name only, and you would assume the payments.

The best thing to do is make an appointment with a financial aid advisor at your college and they can go over your FAFSA and all of your financial aid options.

There are federal loans and private loans for both student & parent. SallieMae is an example of a private lender. They have a division that services federal loans, Navient, that services federal loans.

It is usually best to take federal student loans first. Here is a link to information: Federal Student Aid. A dependent freshman student can borrow up to $5,500 for the financial aid year. The link explains the annual amounts, interest and loan fees. There are a number of repayment options. Students have a maximum annual amount they can borrow, and they can’t borrow in a future year what they chose not to borrow in a prior year.

Parents can borrow federal Parent PLUS loans if they qualify (qualification is based on not having bad credit). Here is a link to information: Federal Student Aid. Sometimes parents find that HELOC loans or private loans are better for them, but that is dependent on individual family situations.

@Mjkacmom @coolguy40 @kelsmom

Thanks everyone for your answers

So we do have the 5500$ Fafsa un subsidized loan which we plan to take

But I may need another 80k worth loan what’s best route I want to keep on my name rather on parents name.

Discover loans are better or is there better lenders ?

Parent plus so parents pay from day-1 ?

So should we wait till 2 year and then take the loan as parents plan to pay first 2 years there is no disadvantage take loan later ? Is it possible I take discover loan now and use it later in the 3rd year ?

You would have to co-sign private loans for that. If you have to take out that much debt for a bachelors degree, then the school is unaffordable. Loan estimates right now are never accurate anyway. It’ll most likely reach 6 figures. That much debt would financially cripple you, likely making graduate school unaffordable as well.

I think you may need to consider more affordable options.


Do you have another less expensive option? This is a LOT of debt.

There is the possibility of getting part way through university and discovering that you do not qualify to borrow enough money to finish. You do not want this to happen to you.

Also, first jobs after graduation often do not pay very well. Some recent graduates find really good jobs that fit in very well with the graduate’s long term career plan but that do not pay very well. It will give you more options if you minimize your loans as much as possible.

In most cases it is better to find a less expensive option that does not require private loans, rather than to take private loans.


There is no reason to take a loan now and use the money later - that’s just paying interest for the period you’d have the loan money sitting in a bank.

You won’t be able to get an $80k loan without your parents’ names on it too. They may only be co-signers, but they will be liable.

Do some reading on the federal loans-- Direct to the student, PLUS, usually to the parent but sometimes to the student, or private. Sometimes private have a better rate and no origination fee, but some other benefits may not be there (dismiss on death of the student, forgiveness options).

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The only way you can get a loan is by either having your parents cosign…or having your parents take out the loan in their name.

If you need a $20,000 loan for each year of college….you will need your parents to help get this.

No way to keep them out of the loan loop unless you have another qualified cosigner.

My question…if you need $80,000 in loans in addition to the $27,000 Direct Loans…you need more than $100,000 in loans for undergrad school. Is this college really affordable for you and your family?


You can take the $5,500 federal loan and “bank it” . However if you need to borrow 80k, the college you chose is not affordable. Where else were you admitted?


Admitted to several colleges but choose North eastern as it’s best combination major I wanted and my dream college. My parents can easily pay 50k a year just looking at other options how to finance balance , I may earn some in the coops. First time parents supporting for college not sure all the process about loans do we wait couple of years and take loan or take it now as some of the lenders like Discover loans sending flyers rewards not sure how it works.
As we already committed it’s too late to change now as it’s past May-1st

Are you currently working? If not, get a part time job. Move to full time this summer. Save it all.
Take the 5.5k federal loans.

How much does Northeastern expect you to pay per year?
How much can your parents pay each year?
50k per year out of their salary and savings?

Parent PLUS loans are easier to get than private loans but have higher interest.

A problem is that if you depend on loans to attend a college, you run a very high risk of not seeing the loans renewed at some point and having to drop out/take a long leave of absence. And regardless of reason, a few months when you’re not in school you must pay the loans back.


If the college is unaffordable, you can get out of your commitment. Taking 100k of loans out, means its not affordable.

You don’t want to be put in a situation where you have to drop out because loans were not approved.

If you just don’t want your parents to pay, but they can afford it without taking 80k of loans on top of your 27k,let them pay for it.


@MYOS1634 @MamaBear2001 thanks for your advice

I totally understand it’s expensive. Northeastern per year cost is 75k they saved good amount in 529 plans rest 100k has to come out from loans
They have good coop program so 2 coops guess I can make upto 40k May be I don’t know yet. I am CS major hope the salaries are good in CS I hope can pay off any loans in couple of years.

Just we don’t understand US students loans process we keep looking at Fafsa site and discover loans don’t understand what’s the best to get it. Shall we wait couple of years and take any finances not covered all the confusion we have
Also Massachusetts has some Mefa.Org not sure how that works someone folks said it’s lower rates

Are you an international student?

No not international my parents lived here since 2001 but they never been to colleges in US.
They are well settled and good income and hardworking. They want me go to best college and I know NE has top CS program

That amount of loan is crippling! Looking at the calculator is $1,000-1,2000/month for 15 years if it is deferred until you graduate. The financial advice is to cap loan payment at 8-10% of gross monthly income. You are looking at needing a starting salary of over $125k starting the day you graduate just to make your loan payment, which is why so many 20-30year olds still have to live at home.

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So you think Mefa is better than Fafsa parent plus loan or private loan as per rates wise ?

I would recommend you take the FAFSA (direct) loan to you, the student for each year. You don’t have to take it in Sept, but do take it before the end of the school year. For 2021-22, the rate should be very low. Pay the rest out of your 529 if you can. Do the same for the next school year.

You are correct that you may earn a lot in your co-ops and can use that for year 3 and borrow the rest. You should also keep applying for scholarships while in school. Sometimes departments have them that you didn’t know about when applying from high school.

Your parents have time to review and compare taking a Parent Plus loan or co-signing a private loan (Discover, SoFi, Sallie Mae). Look at the terms, look at the interest rates and fees, look at repayment. The Plus loans have a high origination fee and the interest rates are set each year; a private lender might have lower rates. However, the Plus loans have certain federal benefits. If the student dies, the loans are cancelled. There are income based repayment programs. There are forgiveness programs for public service careers. Private loans MAY offers these too, but aren’t required to.

Right now there is talk about loan forgiveness by the federal government, and that would only apply to the federal loans, NOT private loans.