Money Magazine outlines options for parents who need to borrow for their children’s college degrees:
Federal Plus Loans
Fixed APR: 8%
The good: Availability. The Department of Education will award PLUS loans for up to the full cost of attendance to anyone with reasonably good credit.
The bad: Lax borrowing standards means it’s easy to take on too much debt.
Private Loans
Fixed APR: Averaging 5.4% and Variable Rates: Starting at 2.9%
The good: Companies competing for your business means more options.
The bad: Borrowing guidelines are stricter.
Home Equity
Fixed Interest Rate: Averaging 5.4%
The good: People can utilize an asset they have.
The bad: There are potentially hidden fees and long-term consequences.
Reference
Mulhere, Kaitlin. “A Guide to Borrowing for Your Kid’s College Degree.” Money Magazine. August 2017.
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