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Choosing an Education Loan
The cost of an education loan is usually the most important criterion.
Featured Author:
Mark Kantrowitz
As a nationally recognized financial aid expert, Mark has been called to testify before Congress about student aid on several occasions.
He has served as a guest columnist for the New York Times and the Huffington Post and has been interviewed regularly by major news outlets, including the Wall Street Journal, USA Today, MSN, CNN, NBC, ABC, CBS, CNBC and more.
Mark is the author of five books, including three about student aid. His most recent book, Secrets to Winning a Scholarship, helps families find and win scholarships. He is also on the editorial board of the Council on Law in Higher Education and the editorial board of the Journal of Student Financial Aid, a member of the board of directors of the National Scholarship Providers Association and a member of the board of trustees of the Center for Excellence in Education.
Mark is ABD on a PhD in computer science from Carnegie Mellon University (CMU) and holds Bachelor of Science degrees in mathematics and philosophy from MIT and a Master of Science degree in computer science from CMU.
Follow him on Twitter at @mkant.
Mark Kantrowitz
April 21, 2009
Who is Responsible for Repaying the Loan
Usually either the student or the parent is responsible for repaying the loan. The Stafford loan is a student loan, while the Parent PLUS loan is a parent loan.
Private student loans are usually student loans, but since students may not have good enough credit to qualify for the loan, a cosigner may be required. A cosigner is a coborrower and is equally responsible for repaying the loan. If the student borrower is delinquent or defaults on a cosigned loan, the lender may seek repayment from the cosigner. The repayment history (including any late payments) on a cosigned loan is reported on the credit history of both the borrower and cosigner and will affect both their credit scores.
Putting it All Together
The following is a list of the most common loans used to pay for college in order from best to worst:
- Perkins Loan
- Subsidized Stafford Loan
- Unsubsidized Stafford Loan
- PLUS Loan
- Home Equity Loan
- Private Student Loans
- Credit Cards
