You want your child to be happy and have a secure future. Getting a college education is one big step to having a great career and financial security. However, having a lot of unmanageable student loan debt can cause a young adult to struggle for years. As a parent, there are several things you can do to set your child up for a successful and happy time in college and post-graduation.
Before and after entering school, saving is the key.
If you are thinking ahead and college is still a few years off, or even if it is right around the corner, using a tax-advantaged educational savings option like a 529 plan (known officially as a Qualified Tuition Program) can help.
Administered by individual states, 529 plans are investment products whose earnings grow tax-free; there is no tax on 529 plan savings when you withdraw it either, so long as the beneficiary, such as your child, uses it for Qualified Higher Education Expenses like tuition, books, computers; more details on the different types of 529 plans. A 529 plan is a great way to put aside money for your child’s education – and any money you save is less money that has to be borrowed.
A 529 plan:
As your child approaches college, be the parent with a plan.
A child in high school might not have a good understanding of the process for getting a loan. One of the best ways you can help your college-bound kids is to coach them on the lending process and responsibilities and help them make smart decisions if they apply for student loans.
Explore parent loans and other options to pay for college.
Depending on the cost at the school your child selects, there may still be additional funding needed after scholarships, grants and other federal aid is awarded. That is where a PLUS or private student loan comes in.
Federal PLUS Loans (also known as the Parent Loan for Undergraduate Students) A Federal PLUS Loan is a student loan option just for parents. There is also a PLUS loan option for grad students.
Key PLUS loan features parents should know:
Private student loans
Private student loans are offered by banks, rather than the federal government and are meant to “fill in the gap” after other forms of funding have been explored.
With a private student loan, either the student or cosigner must have an acceptable credit history. Since many students may not have a substantial credit history, a cosigner would be needed on the loan to satisfy credit requirements. With SunTrust, a parent can be released as a cosigner1 on the loan after the student has made a specified number of on-time loan payments and has developed a sufficient credit background to qualify for the loan independently. View and compare SunTrust private student loans >
Other funding sources for parents
Other common ways parents can help pay for college:
Don’t forget tax advantages
Sometimes the money spent on a child’s college qualified education expenses can be included in a tax return as a credit or a deduction. This is a tax feature that is worth checking into to see if you qualify. For more information, visit the IRS Information Center for Tax Benefits for Education Link opens a new window or contact your tax advisor.
This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. View and compare the available features of SunTrust private student loans.
A cosigner may be released from the loan upon request to the servicer, provided that the student borrower is a U.S. citizen or permanent resident alien, has met credit criteria, and met either one of the following payment conditions: (a) the first 36 consecutive monthly principal and interest payments have been made on-time (received by the servicer within 10 calendar days after their due date) or (b) the loan has not had any late payments and has been prepaid prior to the end of the first 36 months of scheduled principal and interest payments in an amount equal to the first 36 months of scheduled principal and interest payments (based on the monthly payment amount in effect when you make the most recent payment). As an example, if you have made 30 months of consecutive on-time payments, and then, based on the monthly payment amount in effect on the due date of your 31st consecutive monthly payment, you pay a lump sum equal to 6 months of payments, you will have satisfied the payment condition. Cosigner release may not be available if a loan is in forbearance.
A parent who cosigns a SunTrust private student loan may be released from the loan after a series of consecutive on-time payments? The student must apply and qualify.
SunTrust explains how you can save money on college by making the most of financial aid.
Graduating with student loan debt? Here are some tips to help you manage the process.
It's crucial to discuss personal finance with college-bound kids.
This tool helps you to budget for living expenses for one year of college.
Determine the future cost of tuition based on the inflation rate you input.
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