Student loan debt is reaching across the generations.
According to the results of an IonTuition survey released in February 2018, 51% of Generation Z students expect their parents’ student loan debt will negatively impact their ability to pay for their education. And 20% of the students surveyed — between the ages of 18 and 23, according to the company — say their parents are paying back their own college loans still and likely won’t be willing to take out more debt to support their children.
Generation X students are heading to college more prepared financially than those from previous generations — 13% of those surveyed said they had saved more than $20,000 before they got to campus. But they still are stressed about how they can afford higher education, especially if their parents can’t help.
Your parents’ student loan debt might make it difficult for you to cover all the costs of a degree, but there are five ways you can find the money you need.
How your parents’ student loan debt might impact you
If your parents still are making monthly payments on their own student loan debt, they’ll have less money to save for your education.
When the government determines your Expected Family Contribution (EFC) — that is, how much money your family is expected to contribute toward your education — it usually doesn’t incorporate credit card debt or student loans into the calculation. This could inflate your EFC, making your family responsible for contributing money that is actually going toward the debt your parents have.
You can appeal your financial aid offer if you think you deserve more federal help, but it’s not easy.
Also, if your parents have mishandled their current debt they could be ineligible for federal Parent PLUS Loans, which your family could take out for your education. Parent PLUS Loans are available to parents of dependent undergraduate students, but to qualify, your parents can’t have an adverse credit history recently.
If your parents had a loan written off in the last five years, had their wages garnished, or are 90 days or more delinquent on their current debt, for example, they are likely to be ineligible for a Parent PLUS Loan.
In some cases, parents do take out Parent PLUS Loans while still paying their own student debt. A Discover Student Loans survey found that 43% of parents have more than $30,000 in combined student debt, including their own loans and debt they’ve taken on behalf of their children.
If your parents can’t pay for your education, you’ll have fill in the gaps. It might seem impossible, but with the right planning, you can find ways to pay for school.
You still have options
If your parents don’t have the money to help with your college education, you can finance it in other ways. Here are five steps you could take.
1. Ask your parents to apply for a Parent PLUS loan
Even if your parents have an adverse credit history, asking them to apply for a Parent PLUS Loan could still be useful.
If their application is denied, they can try again with a cosigner. If a cosigner isn’t an option or if the application is denied again, then you might become eligible to borrow more federal student loans on your own. Instead of facing the lower borrowing limits of a dependent student, you could be eligible for the higher limits available to independent students.
That means you’ll be able to borrow more from the government, which offers low interest rates and good borrower protections, rather than from a private lender.
2. Apply for private student loans
Federal student loans are preferred because they offer low interest rates, but private student loan lenders also can help you cover the gap in the college costs.
However, most private lenders require you to have a strong income and credit score. If you don’t meet their requirements, you might need to find a cosigner before you’re approved.
Still, applying for a private loan might be worth a shot, especially if your credit score is above 650. Lenders such as Citizens Bank and LendKey don’t charge application fees, so it won’t cost you money to apply.
3. Search for different kinds of scholarships
Your grades, athletic achievements, community involvement, or even the color of your hair could help you win money to pay for college. So you might want to apply for scholarships even if you don’t think you’ll win them.
There are many niche scholarships that don’t receive a lot of applications. Start your scholarship search early so you have the time to apply for as many as possible.
4. Find a remote job
More and more students are working while they’re in school. This can be easy if you can find a flexible or remote job that works around your school schedule.
It might be too difficult to manage full-time work and school, so you could either work part-time or attend school part-time to be able to balance your course load with work.
5. Get help from your employer
If you’ve been in the workforce for a while, your employer might agree to cover some of the costs associated with your education.
In some cases, your parents might be dependent on you
In addition to paying your own way through college, you might also have to help your parents with bills at home. But don’t let this discourage you from chasing your dreams and attending post-secondary school.
Consider ways to share expenses with your parents while attending college.
For example, can you pick a college close to home? Not only will you be able to help with the rent if you have a job, but you can use your local student discounts at participating merchants to lower household expenses.
Finding the money for college isn’t easy, but it’s possible with the right planning and persistence.
Need a student loan?Here are our top student loan lenders of 2020!
|1.24% – 11.44%1||Undergraduate, Graduate, and Parents|
|1.25% – 11.15%*,2||Undergraduate and Graduate|
|1.24% – 11.98%3||Undergraduate, Graduate, and Parents|
|1.24% – 12.49%4||Undergraduate and Graduate|
|1.80% – 11.89%5||Undergraduate and Graduate|
|2.71% – 12.99%6||Undergraduate and Graduate|
|3.52% – 9.50%7||Undergraduate and Graduate|
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers. |
1 Important Disclosures for Earnest.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 9/24/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
4 Important Disclosures for Discover.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
5 Important Disclosures for SoFi.
UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.76% annual percentage rate (“APR”) (with autopay), variable rates from 1.90% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.83% APR (with autopay), variable rates from 1.80% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.98% APR (with autopay), variable rates from 1.97% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 11.26% APR (with autopay), variable rates from 1.90% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 07/10/2020. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).
6 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicant’s ability to supply the necessary information for submission.
7 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.17% effective Sep 1, 2020 and may increase after consummation.