If there is a hierarchy to student loans, we all know number 1. No student loans at all. But for most middle-class families in today’s age, student loans are a fact of life. I’ve made it my mission to help families avoid excessive student loan debt, as I believe it’s one of the major issues we are facing today. But what types of student loans are out there? I do view loans that are low & fixed interest, forgivable, and have favorable repayment terms as the best that are out there. Those, in my opinion, are the Direct Loans offered through the US Dept. of Education. But those rarely offer enough for students to pay for all of college. So then what? I think the 2nd best types of student loans can be offered through your state. Let’s explain.
State Higher Education Authorities
The federal government offers their loans through the US Department of Education. They also offer Pell Grants, Parent Loans, and forgiveness/repayment options there. But did you know nearly every state offers something similar? I so often think parents only consider the federal options, scholarships, and then loans. Unfortunately, the federal Pell Grant and Direct Loans are very unlikely to cover the full cost of college. Scholarships are also hyper-competitive, but the best way to pay. Private loans? Usually saddled with high interest and repayment terms that are favorable to the bank, not you.
That’s where state higher education authorities can come in to play. I believe that each state’s higher education authority can usually offer something in terms of assistance. Let’s take a look at a couple examples:
Pennsylvania has PHEAA, which can offer PA Forward Loans and the PA State Grant. Both require an application, but both can be great options for residents of PA, or for residents of neighboring states attending a PA school. It’s free to apply for grants, it only takes time.
Wisconsin is home to great cheese, the Packers, and some great loan programs. They offer programs geared toward teachers, minority teachers, nurses, and more. These loan programs offer forgiveness and super competitive rates.
Texas offers great loans through an organization, Higher Education Servicing Corp, which are also very competitive. If you’re a resident of Texas and need to bridge a gap, you should be considering this program.
How do I find these?
Thankfully, the US Dept. of Education provides a great link to each state’s higher education authority. These agencies often times will provide you with the background you need to determine if you’ll find a good fit for you and your child. With the student loan crisis growing, and interest rates rising, we are headed for a reckoning. By at least keeping your interest and loans manageable, it can keep your retirement on track, and get your child off to a good start.
Get in Touch
If you need help discovering the 2nd best types of student loans for your child, or paying for college in general, reach out. I’m happy to help and make sure you and your child don’t fall victim to excessive student loan debt.