Research supplemental borrowing options

If federal student loans are not enough to cover your bills, supplemental borrowing can help. Federal and private supplemental borrowing only should be considered after all other resources have been exhausted. These loans generally have higher interest rates, less favorable repayment terms (some of which begin while you are still in school) and fewer forgiveness, cancellation and repayment assistance programs.

The federal Parent Loan for Undergraduate Students (PLUS) program is a credit-based federal loan program that allows parents to borrow on behalf of their undergraduate students to meet educational expenses. Graduate students may also borrow through the PLUS program in their own name to meet the costs of graduate school. As with the federal student loans, the PLUS loan program generally has more favorable interest rates and repayment terms.

Private education loans through a bank or financial institution have more favorable terms and conditions than a typical consumer loan, but they may require a creditworthy cosigner. It is important to do research before selecting a loan product because interest rates, loan terms and repayment options vary widely.

Compare at least three supplemental loan products before you make a decision. Compare origination fees, the interest rate (the percentage rate and type, e.g., fixed versus variable), repayment start date, repayment plan options and customer service experiences. Only borrow what you absolutely need to meet your costs. Repayment can last 10 years or more after school. It’s like signing up for a long-term relationship with the loan company, so make sure it is as positive as possible. Use a loan comparison tool like FASTChoice to compare options. Links to an external site.

 

(11/15)