Private student lenders and banks are beginning to target their student loan offerings at one demographic who might be able to afford the rising tuition rates: parents. Lenders like Sallie Mae are coming up with “parent loans” that give borrowers funds to pay for their college-bound children’s education.
These parent loans are becoming available at a time when student loan debt is rising at a steady rate. Total student loan debt is estimated to be around $1.3 trillion- and grows by about $2,726 every second! Increasingly, that debt is being passed on to students’ dads and moms. Parents cosign approximately 90% of private undergraduate student loan debt, according to data from MeasureOne.
With these new loans, creditworthy parents will get lower interest rates. In addition, they will not have to pay origination fees, which is an additional cost attached to the processing of a loan. However, these new financing options may still not be enough to combat the rising cost of college tuition.
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