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 free 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 2018!
|1 Important Disclosures for CollegeAve.
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.
2 Important Disclosures for Discover.
3 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) or Turnstile Capital Management, LLC (TCM), which are not affiliated entities. Certain restrictions and limitations may apply. 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. All loan products may not be available in certain jurisdictions. Other terms and conditions apply. Ascent is a federally registered trademark of 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 applicants ability to supply the necessary information for submission.
* 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.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.69% – 10.94%1||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.97% – 12.97%3||Undergraduate and Graduate||Visit Ascent|
|4.34% – 12.99%2||Undergraduate and Graduate||Visit Discover|
|4.12% – 10.98%*,4||Undergraduate and Graduate||Visit SallieMae|
|5.03% – 11.23%5||Undergraduate and Graduate||Visit PNC|
|4.00% – 13.00%6||Undergraduate and Graduate||Visit SunTrust|
|4.72% – 9.81%7||Undergraduate and Graduate||Visit LendKey|
|3.72% – 9.68%8||Undergraduate, Graduate, and Parents||Visit CommonBond|
|4.19% – 12.06%9||Undergraduate, Graduate, and Parents||Visit Citizens|