Last year I didn't need to cosign loans for my children in college and the interest rates were almost reasonable. This year, apparently the rules changed and they now require a co-signer. The kid's interest rates for the loans are based on the parents credit rating. Parent's credit could make children suffer with 18% interest rates for these loans. Is that fair? There are other alternatives. Your thoughts?
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ReplyDeleteInterest rates for college loans are based on a number of factors, including to a lessor degree, the student's income, the student's credit score and payment history, if any, but more importantly, on the parent's financial history. Recently many parents' financials have taken a serious plunge. The result is extremely high interest rates for the college loans parents cosign for the student as well as parent plus loans. Ultimately the students will pay a very heavy price, for a very long time (10 to 15 years), because of their parents' financial status. To counter-act negative affects of their parents poor credit, the student might consider building their own credit.
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