All through high school, I knew the only way I would get to college was with a lot of help–from scholarships, working, and loans. I applied for every thing I could, and I was blessed to receive little scholarships from the local women's and Rotary clubs and grants from the universities I applied to. But it wasn't nearly enough. I ended up with over $50,000 in student loans for my undergrad years, and then while I worked as a new teacher, another $30,000 in grad school loans. And it was all on me. The concept of parent loans or private student loans was foreign to us then. My husband had a similar situation, and after not paying our loans off quickly enough, we ended up deeply in debt. It was just at the end of 2014 that we finally paid off all of our undergraduate and graduate school loans, and we don't want to be in debt ever again!
Now we have three tweens, who will all be in college at the same time. And that's terrifying. We've worked so hard to get where we are financially, and we finally have a handle on our retirement savings. We've only scratched the surface of college education savings, opening a 529 account for each of our three children. But there's going to be a huge gap, so I'm trying to learn as much as I can as quickly as I can.
I am constantly asking questions of friends and neighbors around me who have kids heading off (or already at) college. How are they doing it? Some head back to work after many years at home with the kids. Almost everyone's kids are working while they're in school, and coming home this summer to work 1-2 jobs to earn more to take back to school in the fall.
While I'm thankful that we are in good shape financially, I know that it will affect what financial aid our kids will be eligible for as they apply to colleges. We have just four years now to figure out all our options and be ready for when our oldest does his applications (hold me).
I spent some time on the College Ave Loans website and found the Resources section really helpful. It's been so many years since I did the FAFSA and other paperwork (and I was a teenager at the time!), so the refresher was great. I know I received federal Stafford loans way back when (ahem), and those should be used before considering private student loans. But if that doesn't cover the cost of attendance, it is worth comparing the federal option with the interest rates of a private loan, particularly if you have strong credit.
I found the website easy to navigate, and I especially liked the tools with slider bars which let me try out some scenarios–like paying while a student is still in college, at various monthly payment levels, and seeing how much interest we'd pay over the life of the loan. If your kids are near college age or you're just thinking ahead like I am, go try out the calculator. It had so many options that you can configure to help you see the different plans available and figure out the right type of loan with the variables that work for your situation.
Rather than have your student take out an undergraduate loan (with you as co-signer), College Ave Loans gives you the option of a parent loan, which may save you money if you have good credit, and your child is not responsible for the repayment. There is no origination fee and lower fixed interest rates than the federal program, plus you have the benefit of having up to $2,5000 directly deposited into your bank account to pay for extra educational expenses, so you'll have control over spending on books, electronics, and dorm supplies. With the parent loan, you can also pay while your student is in school to lessen the life of the loan.
If you're considering student loans to finance college, make an appointment for a complimentary, personalized credit education session with an Experian® Credit Educator agent, in collaboration with College Ave. It's a one-on-one 35-minute phone call where you receive your credit report and score, walk through the report, and discuss how to improve your credit score ahead of applying for financial aid. If you're not sure where your credit stands, it's a great resource.
Planning for college costs feels a bit overwhelming to me, which is why I'm learning over these next few years to be ready for it. Take a look at the College Ave Loans website to learn about your options; they explain the financial aid process, FAFSA, and more.
How are you planning to finance college?
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.