Financial Planning Information for Parents
Private student loans and student lines of credit
Most banks and credit unions offer personal loans and student lines of credit that you and/or your child can apply for.
The main difference between a personal loan/line of credit and the government student loan program is in how the interest is repaid. If your child qualifies for a private loan/line of credit, he/she will usually be responsible for all the interest that accrues as soon as the loan has been negotiated.
In contrast, if your child qualifies for a government loan, he/she will not be responsible for the accruing interest provided that he/she is registered as a full-time student and takes the appropriate steps to maintains his/her interest-free status.
Due to the advantages offered by the government student loan program, we'd recommend that your child try to qualify for a government loan first before looking at private loans. But if you do decide to pursue private funding sources, be sure to shop around and be aware that you may have to co-sign the loan or the line of credit.