re: Parents of college students - student loans

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I found this interesting, so I did a quick search. Turns out student loan rates are around 6-8% (similar to an auto loan, which is fair) while CC rates generally exceed 15%. Not suggesting taking on debt early is ever a good idea, but am I missing something?

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Perhaps dating myself a bit; but, when I was in college the first time around private student loans were as little as 2-4% and credit cards for someone with good credit were 8-10%. The cost of college was also much lower.

Even my Grad Plus loan of a decade ago was less than 5%.

So you are right; under the current lens it may seem in line. By way of comparison to historical norms it’s positively outrageous which is why there’s current debate about the actual value of a college education and whether or not it’s worth it.

To the OP, from what we’ve seen there’s an annual and lifetime limit. It’s per child and not per family. Meaning; you aren’t sacrificing your second child to educate your first. Subsidized and unsubsidized rates vary slightly. Some defer accruing interest until the child graduates and others do not. All have an origination fee of somewhere around 1%. Private loans are sort of an option; but, based on what we saw there’s a real premium. My daughter who obviously doesn’t have much credit because she’s 18 was offered a private loan at 12% via a local credit union here in FL.