You asked: Should a parent or student take out the college loan?

Is it better for student or parent to get college loan?

In most cases, it’s best for the child to take out the loan in his or her own name, both because loan terms for students are usually more flexible and because if the parent cannot keep up with the loan payments, it could make it difficult or impossible for them to save for their other financial goals.

Are parents responsible for student loans?

Parents are not responsible for repaying their children’s federal student loans and cannot cosign these loans. If the child defaults on a federal student loan loan, only the child’s credit is ruined. … Only the parent is responsible for repaying a Parent PLUS loan, but there is no obligation to borrow a Parent PLUS loan.

Can my parent PLUS loan be forgiven?

A federal parent PLUS loan may be eligible for forgiveness through an income-contingent repayment plan or through the Public Service Loan Forgiveness program. … In most cases, a parent borrower will take out a PLUS loan once their child reaches their federal student loan limits to cover the remaining costs.

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How do you pay for college if parents make too much?

If your parents make too much money for you to get financial aid, you still have options to pay for college. Look into merit-based scholarships and private student loans. You can also get a part-time job to offset some of the costs of your post-secondary education.

Can parents pay off child’s student loan?

While there are no rules restricting parents from paying back their children’s student loans, if you choose to pay off your child’s student loan, you will most likely need to file a gift tax return and pay any applicable gift tax . … You will want to make sure you have the necessary time to pay back that line of credit.

Can I sue my parents for college tuition?

In most states, the family court system generally assumes that children’s parents will adequately represent those children’s best interests. With that being said, some states do allow children over the age of 18 to sue their parents in order to have their college education expenses paid for.

Does parents credit affect fafsa?

There are different types of financial aid available, and the majority of federal student aid is not contingent on student or parent credit history, including federal student loan debt the parents may have.

Are Parent PLUS loans forgiven after 20 years?

To enroll, you have to consolidate parent PLUS loans into a federal direct consolidation loan, then contact your loan servicer to get on an ICR plan. You must recertify your financial information annually, which may change your monthly payments. After 25 years of repayment, any remaining balance is forgiven.

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Do student loans go away after 7 years?

Student loans don’t go away after 7 years. There is no program for loan forgiveness or loan cancellation after 7 years. However, if it’s been more than 7.5 years since you made a payment on your student loan debt and you default, the debt and the missed payments can be removed from your credit report.

Can I claim my parent PLUS loan on my taxes?

Yes you can claim the interest. This deduction lets you claim up to $2,500 of interest you paid on qualifying student loans. To get this deduction: … If you are a parent and the loan is in your child’s name, then you can’t deduct the interest on your tax return even if your child is your dependent on your tax return.