<p>This concerns loans which we’ll need in order to meet our EFC (not loans that are part of the aid package).</p>
<p>Should we take out the loan or can D take the loan with us as co-signers?</p>
<p>Are loans taken once (at the beginning of the year), or twice (at the beginning of each semester)? If twice, do the 2 loans have to be the same amount?</p>
<p>How much should we borrow? We will be able to pay quite a bit of the EFC from income, but not all. We obviously don’t want to over-borrow to make up the difference, but I’m concerned about under-borrowing and then having our savings wiped out by an unforseen expense. Which way should we err? Or do we even have a choice?</p>
<p>We have excellent credit. We don’t want to dip into home equity, but PLUS at 8.5% sounds ridiculous. Is there a third alternative?</p>
<p>Retirement loans, insurance policy loans, and peer to peer loans. The latter is a private investor, generally a relative, loaning money to the student. The principal and/or interest may be forgiven at some point in the future (like upon graduation or upon the death of either party).</p>
<p>there are federally backed loans, Stafford/perkins and those are taken out in the student’s name (and what is probably part of your FA package). And the Plus loan (taken in parent’s name) can be used to pay your EFC. </p>
<p>My son’s school just lists ‘suggested plus loan’ for whatever the difference is between the COA - scholarship - stafford/perkins loans -work study. I could take out a plus loan, or pay cash or take out any other kind of loan. The school doesn’t care where you get the money</p>
<p>You can borrow from anyone you want if you don’t want to do the plus loan for the EFC. You can call that a ‘student loan’ but it’s just really an unsecured private loan. Most banks won’t let a student borrow without a cosigner (unless they are charging loan shark rates). I wouldn’t take them out in the kid’s name, but I guess you could if you wanted to (and are going to help pay them back)</p>
<p>My understanding is that the advantage of D taking out the loan (we would co-sign) is that payback wouldn’t start until after she graduates. We do intend to pay off the EFC loans ourselves, even if they are taken in her name. She’s going to be responsible for the loans included in her FA package.</p>
<p>The reason we must get some kind of loan is that we simply cannot meet the EFC with current income. That’s why I don’t see much point in our taking the loan, where payback would start immediately. If we could do that, we wouldn’t need the loan in the first place.</p>
<p>I don’t know if there are private loans that will allow you to defer repayment until after graduation.</p>
<p>Stafford/Perkins/Plus ALL allow this option. Although and UNsubsidized portion of the Stafford and All the PLUS loans will accrue interest from the moment the funds are disbursed.</p>
<p>There may be private (non gov backed) loans that allow you to defer payment. I know you have the option (with federal loans) to pay the interest as you go along so you aren’t accruing interest on the the interest (if you know what I mean)</p>