Paying for College

Private student loan volume has grown consistently over the past decade. According to the College Board, private loans have grown at a compound annual growth rate of more than 20% over the past 10 years. This growth is a direct result of two dynamics - the increased cost of attending college and stagnant federal loan limits.

Since 1990, college costs at 4 year colleges have increased more than 50%. These increases have left families facing a difficult dilemma - where to find the money to pay for college. Scholarships are a great first step, and federal student loans are the most affordable loan options, but together they are rarely enough to cover the full cost. That’s why students are witnessing the introduction of more and more private student loan options like Think student loans, Astrive student loans, Tuition Answer student loans and private loans from My Rich Uncle.

These private student loans are designed specifically to help families pay for education so they generally come with in-school deferment provisions so no payments need to be made while the student is enrolled. And in most cases, the parent and the student are both obligors on a private student loans so they share the debt. These two reasons are why many families choose private student loans over home equity loans which need to be repaid immediately and are the sole obligation of the homeowner (generally the parent.)

If you are a student in need of additional funds to help pay for education expenses like tuition, room and board, a laptop and other school fees, first pursue scholarships, then federal student loans and, finally, pursue private loans. If you do need private student loans to help fill the gap, research your options online. You can find out a lot about Astrive, Think, NextStudent, Tuition Answer, My Rich Uncle and other private student loan providers by doing some basic web research on their sites. When you’re ready to make an informed decision, talk to your parents and make sure everyone is on the same page. These are important decisions so don’t take them lightly.