You might be qualified to borrow an additional student loan such as an unsubsidized Stafford Loan or a private education loan. These loans tend to be more expensive than need-based loans.
Students who don’t demonstrate need, or need to borrow more than the subsidized loan amount, can borrow unsubsidized Stafford loans. Unlike subsidized loans, you are responsible for paying interest on the loan while in school.
Private Student Loans
There are thousands of non-government loans available to students. Search online, visit your local library and seek the advice of your guidance counselor to find out which scholarships you may be eligible for.
Your parents can take out loans to cover college costs. They’ll need to meet certain criteria like demonstrating good credit to qualify for most loans.
Federal PLUS Loans
The most popular loans for the parents of dependent undergraduate students are PLUS Loans. Parents can borrow up to the full cost of tuition, minus any financial aid.
Federal Grad PLUS Loans
Graduate students can borrow up to the full cost of tuition minus any financial aid. Students are not required to repay the while in school and can request 6-month deferment upon leaving school.
Home Equity Loans
If your parents are homeowners, they can borrow against their home. Your parents may be eligible to borrow a percentage of their equity, the difference between the market value and how much is owed on the mortgage. This money can be used to pay for education costs. The rate is comparable to other borrowing options. The interest paid on this loan may be tax deductible, but they may have to pay a fee for this type of loan.
You can withdraw from an IRA account to pay for college. An IRA is a savings account designed to put aside money for retirement. A 10 percent fee is charged if you withdraw money before you reach age 59 except when the money is used to pay for college. But, you may need to pay federal and state income tax on your withdrawals.
Tuition Tax Credits
A tax credit is an amount of money you can subtract from your federal tax bill. It is a dollar-for-dollar reduction of the amount you owe. If you have family members in college, and your income doesn’t exceed certain limits, you may apply for a tax credit.