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Is there a difference in the interest rate if parents take out student loan?

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Will there be a difference in the rate of interest if one of my parents take out a student loan instead of me?

Well, parents can opt for parent plus loans for financing education of students. The interest rate is 7% for the 2017-2018 academic year. But the following excerpt from Forbes is noteworthy:

Along with not being eligible for student loan forgiveness, Parent PLUS Loans are not eligible for the income-contingent, or pay-as-you-earn repayment plans, so the only qualifying option is to repay the loans under standard repayment (which can include graduated or extended plans). This could be difficult for parents since it doesn't allow much flexibility.

If parents borrow private student loans, they will typically pay higher interest rates and fees than Federal student loans. And again, there are limited options for forgiveness and repayment.

Finally, if a parent takes out a Home Equity Line of Credit to pay for their children's college education, they face a couple of challenges. First, interest rates are currently very low, but they will likely rise by the time the student graduates college.

Sub: #1 posted on Wed, 12/06/2017 - 00:49

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I feel that it is better for the students to take out a loan to finance their education. Later, they can repay the loan with their earning.

Sub: #2 posted on Wed, 12/06/2017 - 05:26

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