Fall 2021 Important Parent Student Loan Borrowing Facts

My custom excerpt

By: Reyna Gobel

Parents, at this point you know if you’re going to need extra money to pay for your student’s education this fall. You also likely know which student loans you will borrow. If borrowing parent PLUS loans, you’ve likely signed a promissory note already. However, you may still need answers on payment due dates, co-signer responsibilities, and what to do if your student needs more money than you anticipated.

We compiled the following answers to the top questions on student loans we get from parents:

When payments are due

Parent loans as opposed to loans for students may require payments before a grace period after college ends. Grace periods are an a period of time after graduation where students don’t have to make payments. Federal parent PLUS loans require a deferment request fin order to get a grace period. Private students loans can set their own rules for when payments are due. Parent and student private loans could also have different payment due dates.

Whether to pay interest while in school

Sometimes it makes sense to pay interest on student loans while your student is in college. Other times it doesn’t. The time it’s absolutely a bad idea is if you think you or your student will qualify for Public Service Loan Forgiveness, a program from the federal government where the remaining federal student loans balances are forgiven after 10 years of on-time payments while employed for 10 years with a public service employer. Paying down these loans is just reducing the amount of foIf your a public service employee, you may qualify on your parent loans as well. Other times it’s a bad idea is if the money could instead be used to borrow less next time.

Co-signer responsibilities and rules

If you co-signed a private loans for your students, it’s a good time to check out co-signer responsibilities and rules. For instance, graduates may qualify for co-signer release after 12 to 24 payments. You also want to see if co-signing affects your student’s ability to get a temporary payment  break for situations such as unemployment. The reason why this is important is if you is so you build up your savings account to handle payments you may be responsible for in the case of unemployment for the future graduate and during the co-sign release time frame. After all, your credit is affected by the loans you co-sign, too.

Back up options for more cash

Hopefully, the amount you and your student borrows covered needed expenses. To pre-empt this possibility, carefully review budgets with your student only a monthly basis. Helping them spend better means you can borrow less. Decide quickly if they’ll work during college and make su from the college, and additional private student loans.

How student loans and refunds are distributed

Student loans are generally distributed directly to the school. Then, refunds in excess of tuition, fees, room and board may be issued either to the parent or the student. You should double check with the school and the lender for how this works at their institution. Because your student can get classes cancelled, etc. If loan payments aren’t paid, you’ll want to do due diligence to call lenders and servicers to make sure payments are on their way at least a week or two before tuition and other charges are due. The school financial aid office can also keep classes from getting cancelled if federal student loans are on their way if notified in writing and everything is agreed to. Do fill out any forms requested.


Getting approved for student loans is just step one of the financial aid process. Afterwards, you’ll need a plan for repayment, coordinating budgeting with your student to avoid additional borrowing that semester, and following through with the distribution process. An hour of planning now will save you several tylenols worth of headaches later.