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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I know someone planning to do this, she found a private loan with a lower rate and no upfront fees (according to her).   [b]However there is zero chance of any repayment plan on a private loan[/b], which may or may not be of interest to you.[/quote]

Why is there zero chance of repayment for a private loan? [/quote]

PP who wrote before I woke up. Income based repayment plan.[/quote]

Parent PLUS are not eligible for income driven repayment plans unless you consolidate into a federal direct loan and do income contingent repayment (an antiquated plan that requires higher payments than usually seen on other, newer income driven plans). They do come with forbearance, deferment, and discharge options that the private market won’t offer. Interest rates are fixed 5.3% (though have a 4% origination fee), though there is no underwriting really, only an adverse credit history check that is easy to pass.

But it is true that federal student loans come with fairly generous Repayment (10% of discretionary income) and forgiveness options. Current rates an sub or unsub for undergrad are 2.75% which is a great rate generally and considering zero underwriting. I have no problem with my kids borrowing loans under these conditions. It’s good to have some skin in the game and grow your credit profile with a fairly safe form of debt.[/quote]

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