Did you know that Americans owe more than $1.2 Trillion on private student loans? Unfortunately, many private loan borrowers don’t understand the difference between private and federal loans when they take out the loans. That lack of information can destroy the financial future of the student loan borrower and the cosigner.
Why Should A Private Student Loan Be My Second Choice?
Federal student loans offer a number of financial stop gaps to help you if you have financial difficulties. You may be eligible for deferment or forbearance of your student loan.
Better yet, federal student loans are eligible for income driven repayment plans. That means that your student loan payment will be based on your annual income and family size. That number can change yearly but it will be based on your income.
Many of these income driven repayment plans have forgiveness options. You’ll never find these income driven repayment forgiveness programs in most private student loans.
Is A Parent Plus Loan An Alternative?
One option for parents is a Parent Plus Loan, which have relatively low interest rates. It makes the parent responsible for paying the loan and these loans are eligible for income driven solutions.
When a parent cosigns on a private student loan they are still as responsible as the cosigner. Very few private student loans have these flexible income driven repayment plans for forgiveness options.
What You Should Do If You Need Help With Your Student Loans
Your next call should be Student Loan attorney Nancy Cavey. Contact her today at 727-828-9955 and order a free copy of her book, “Student Loans – What They Didn’t Tell You!”