Office of Student Aid : Parents of Students : Parent Newsletter

Volume 5, Issue 5--September 2007

Keeping Track of Student Loans

Many parents want to be able to contribute financially to their children's post-secondary education. Unfortunately, as increasing numbers of parents are discovering, college costs are rising faster than many family incomes. Once the monthly utility and credit card bills are paid, and other necessities purchased, many parents find that these costs have all but consumed the family budget, leaving little left over for college savings. Even parents who have managed to put aside some money for their children's college costs often find that their savings don't go as far as they might have hoped.

Fortunately, educational loans are available to help students meet their college expenses. Some families opt for Federal Parent PLUS Loans to supplement their students' Federal Stafford Loan eligibility, some families choose private alternative loans, and some families opt for a combination of the two. Regardless of the types of loans you choose, it is crucial to involve your son or daughter in the process of obtaining financing for his or her education.

Sometimes parents, in an effort to hasten the funding flow, "take care of" their students' loan applications for them. Please don't be tempted to do this! It is critical that your student submits his or her own loan applications if the debt is being secured in his or her name. Legally, your student must apply for student loans, sign promissory notes, and complete any other necessary requirements him- or herself. Similarly, when it comes to parent loans, only you should submit loan applications for funds in your name; your son or daughter may not initiate parent loans on your behalf.

Once students have secured educational loans, we recommend that they continue to monitor their outstanding balances and periodically review their repayment obligations. Our Web site includes debt management that can help families decide which loans to choose. It also offers resources to help your student become financially literate and stay up-to-date on his or her loan debt and repayment obligations.

Considering the costs involved in higher education, it is critical that students stay informed about their educational loan debt and aware of their financial obligations as they prepare to begin repayment of their loans after leaving college.