WSJ: Paying For College Gets Creative Thanks To Low Interest Rates
by July 30, 2012 3:09 pm 94 views
The Wall Street Journal's takes a look at changing dynamics in the world of financing a college education.
While federal student loans have been a traditional option for many parents and young adults contemplating college, low interest rates are propelling alternative payment methods.
For instance, many colleges now offer tuition installment plans, which spread payments over a 9 to 12 month period. Also, some schools are offering zero interest loans.
As college endowments bounce back from their financial-crisis lows, some schools are lending money to students with rates as low as 0%, says Justin Draeger, president of the National Association of Student Financial Aid Administrators. Schools, eager to attract student
s, can include these loans in their financial-aid letters.
All types of loans made by colleges have grown from about $500 million in the 2007-08 academic year to roughly $720 million in 2010-11, according to the College Board. Terms vary by school; repayment can be as short as one semester to as long as 10 years after graduation.
Two other non-traditional method college loan payment methods include home equity loans in the 3% to 6% range and credit cards with 0% introductory periods.
Read more on the subject at this link.