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Hence, our kids want to fly away from the nest and pursue their academic career in college. But with escalating costs, can we afford it? Will they have to take part time jobs to survive or can we meet their financial needs with college loans?
These are some of the questions that concerned parents and aspiring students are asking themselves nowadays. It’s hardly surprising when you look at the facts—fees and tuition costs have increased by 51% for public four-year colleges and 36% for private four-year colleges in the past decade alone. This, along with the rise in disproportionate income for families likely to have college-age children, means that more and more parents or students are turning to direct loans or private college loans to help themselves. .
Why do parents and students need extra support?
Every parent and family is informed when they apply for a place what their Expected Financial Contribution (EFC) will be for their child’s further education. This is calculated by subtracting any government grants and federally supported college loans that will be awarded to the student. Every family has many financial commitments and if you don’t have enough savings or disposable income the extra support for your child throughout college can be too much. But all is not lost! Other sources of financial aid are available.
How can the deficiency be filled?
Additional financial aid comes in all shapes and sizes. They typically take the form of unsubsidized federal student loans, state-sponsored loans, and private-sector college loans. It is the latter that has experienced the most significant growth over ten years (an increase of 745%) and has used $10.5 billion in aid to finance college education.
Available private college loans can be divided into student loans or loans for parents:
student loan
o Private college loans from banks and other funding sources.
parent loan
Private education loan from banks and other lenders.
o Home equity loan to reduce the equity from your property. This money can be used to pay for the college fees.
Is it all worth it?
It is all too easy for parents and students to balk at the idea of taking out college loans to enable them to further their education. Raising the hard cash needed to see them through up to four years of study may seem impossible, but they just need to realize the benefits it will bring to their child and America. College-educated individuals earn more than high school dropouts, they also participate more in society and their children will receive a higher level of education.
The investment is worth it.
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