Expert discusses how to prepare for student loan applications
InvestigateTV - The school year is wrapping up and for many high school graduates, it may be time to fill out online loan applications.
As a parent, you want to get the big picture on college will cost as soon as possible, which means logging on the Free Application for Federal Student Aid - or FAFSA - with your child. It’s a must for families who will need help paying for college.
Cherry Dale, a financial coach with the Virginia Credit Union, said just the act of filling it out makes students eligible for grants and scholarships, as well as federal student loans. She said the website is very helpful and can answer many of your questions.
“You are really going to need your tax documents as a parent, so that’s something that you want to gather before you even start the FAFSA process,” Dale explained.
Dale added that if you have an option to choose, it’s always smarter to with federal over private student loans. Federal student loans typically have a lower interest rate and more flexible repayment options. Private loans often come with higher rates and require a cosigner, which puts an additional person on the hook likely a parent.
If you want to help your child pay for college, Dale said you might consider a Parent PLUS loan. One of the biggest differences between it and other student loans is it requires a credit check, but to be eligible, your child still needs to complete the FAFSA.
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