Loan options for families

When financing a college education, families often find that there is a financial gap between the total cost of the education, the amount that the family has saved and the amount that the student may receive from the college in scholarship or gift aid. This gap in funding can be met through loans. Choosing the right mix of those loans is unique to each family. Here’s what you should know:

There are three options to meeting the gap for a college education:

1. Student Only — The student borrows a Federal Stafford Loan up to the annual loan limit and then a Private Education Loan that is co-signed by an adult.
2. Parent and Student Share — The student borrows a Federal Stafford Loan up to the annual loan limit, while the parent borrows a Federal Parent PLUS Loan. The student may also borrow a Private Education Loan that is co-signed by an adult.
3. Parent Only — Parents borrow amount necessary to cover the gap in education costs with Federal Parent PLUS Loan.

Things to Know:

• If a FAFSA has not been or will not be completed by the student then the only loan option available is the Private Education Loan borrowed by the student and cosigned by an adult.
• Federal Stafford and Parent PLUS Loans are available to families regardless of their income levels.