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The first step is to investigate funding options that do not need to be repaid, such as scholarships and grants, says Martha Holler, spokesperson for Sallie Mae, the nations leading provider of education funding. Once those avenues are exhausted, an education loan can help. Federal Stafford loans are the most common type of student loans for undergraduate and graduate borrowers. A Federal PLUS loan is another way to bridge the college-financing gap. PLUS Loans, which are not based on income or assets and do not require collateral, are the lowest-cost way for parents to finance their childs education, allowing them to borrow as they need, including money for tuition, room, board, books, supplies and even travel, to cover the cost of attendance at their childs college of choice. Parents can borrow for college, but they cannot borrow to pay for their retirement, explains Holler. Most families qualify for PLUS Loans and everyone gets the same low-interest rate, regardless of their credit history. Many families turn to private education loans for last-minute college-financing needs. Interest rates and fees are based on credit history, so the better the students or co-signers credit, the lower the interest rates and fees. Students and families are encouraged to explore whether their school offers the option of making monthly tuition payments over the course of the school year. This is an interest-free alternative to making large, one-time payments due at bill time. For a small fee, families can reduce the amount they need to borrow to cover the cost of college. The campus bursar or financial aid office can provide additional information. Finding last-minute money to pay for college is doable, and parents dont have to take a second job or another mortgage on their home to accomplish it, adds Holler. |
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