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How To Find Sources For College Financing

By Jason Markum

College is one of the most difficult things to pay for on the planet. The costs of college have skyrocketed in recent years and show no signs of slowing down anytime soon. Colleges almost always increase their tuition rates every year at a rate higher than normal inflation. Even less expensive state colleges are becoming prohibitively expensive for most Americans.

Apart from buying your house, a college education could very well be the most expensive thing you purchase during your entire lifetime. Finding money for college can be difficult. After you have exhausted scholarships, and government grant options, where can you go to find the money you need for yourself or your children? That’s what I’m going to discuss in this article today…

One program to look into is the parent loans for undergraduate students program or PLUS as it is often referred to. This program allows parents to borrow up to $4000 a year per child from the government generally at lower than market rate interest rates. These loans are usually made based on how well the parent can repay, not on financial need. Usually you have to begin repaying these loans almost immediately, usually within 60 days after the funds have been sent in to the school.

Another way to raise money for college is with an unsubsidized bank loan. A lot of different banks as well as credit unions offer special college loan programs, and often charge interest rates one to 2% below market norms. These programs generally have longer financing schedules than you would normally see in a regular consumer type loan. These loans are made to the parent, not the student as the parent has more of a financial history and credit history from which the bank can rely on.

Another way to raise money for college is to use a bank savings and loan plan. This is similar to a line of credit except it’s based on how much money you have in your savings account. The bank usually multiplies the amount of money you have in your savings account by a certain figure and loans you that amount. Of course, if you have already exhausted your savings account paying for college up to this point… this program may not be very helpful to you.

Another way to raise money is by looking to college-sponsored financing programs. Some colleges, especially private colleges, offer many different creative financing options. In essence, the college will loan you the money themselves and allow you to pay them back over a very long period, sometimes 20 to 30 years. The disadvantage of this is that you may pay more interest over that long loan period. Often the college will sell your loan after you child has graduated to another financial institution such as a bank or loan company of some sort.

The point is, don’t ever give up! Even if you feel like you’ve exhausted all the possibilities, keep looking because there are always new programs springing into existence, and old programs that you may not have explored yet. If nothing else, meet with your college’s financial services office and explained your situation to them. Tell them that you just can’t afford tuition and ask if there’s anything they can do, or if there’s any way you can work together to figure out how to make it work. You’ll be surprised how often this will yield results.

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