Frequently Asked Questions about Education Finance

Find the answers to the most commonly asked questions about financing children’s education here.

Do I have to fill out the FAFSA if I want federal loans for parents of students?

This will depend on the policies of the school your child attends. Contact the school’s financial aid office to determine if parents must complete the FAFSA in order to qualify for parent PLUS loans. If you do have to fill out the document to finance children’s education, make sure you complete it as quickly as possible.

How do I complete the FAFSA?

You and your student child should be able to fill out the application together online. The FAFSA has its own website where parents and students can easily log in and submit the forms electronically. If you need more information, talk to your child’s financial aid advisor.

What is a parent PLUS loan?

A parent PLUS loan helps you finance children’s education through low-interest, government-subsidized borrowing. PLUS loans allow parents to borrow up to 100% of their child’s education costs. In some cases, the interest on a PLUS loan may be tax-deductible as well.

Is my income too high to qualify for a parent PLUS loan?

One of the nice things about parent PLUS loans is that they are not need-based. If your child is enrolled in an accredited school at least half-time, then you can qualify irrespective of your income. You will also not have to present any collateral to qualify for PLUS loans.

How can I estimate how much my child’s education will cost?

Your child’s school should offer statistics on average yearly expenses for in-state and out-of-state students. These estimates will include the cost of tuition, textbooks, materials, and room and board. Keep in mind that if your child lives off campus, his/her living expenses may be higher than the college anticipated in their figures.

Aside from federal loans, how can I finance children’s education?

If you are a homeowner, you could always consider a home equity loan. Home equity loans are secured by the value of your property, so the interest rates tend to be lower than those of other education loans. In order to get a home equity loan, your home’s value will need to exceed the outstanding balance on your home loan. Remember that home equity loans are usually very long-term commitments that come with the risk of losing your home if you fall behind on payments.

Your student can help too! View How Your Child Can Help for more information on how.