07-24-2009, 02:26 PM
mattkime wrote:
>>I wouldn't cosign on any loan though. My parents didn't cosign for me
Eh, you should check to see what the costs are for _not_ cosigning. Some parents might have good reason to trust their kid to repay. Would seem silly to pay some large percentage more due to lack of trust.
:agree:
Today's student loan rules are not the ones many of us went through school with years ago. In the last decade they also especially relaxed the rules on so-called private loans and the interest rates that can be charged. A student may not need a co-signer on the government sponsored direct and indirect student loan programs to get the good interest rate. But on the private loans the interest rate is based on the student's credit rating (usually non-existent) and can be over 13%. With a co-signer, they can get a lower rate because it will be partly based on that person's credit rating. For example, last year one son needed private loan money to pay for his school. Through SallieMae by himself the rate would have been just over 12.6%. With me as a co-signer, the rate he got was about 10.5%.
Hunting around this year, there are some lenders who do better than SallieMae on private loans. For the Stafford Program subsidized and unsubsidized loans the interest rates are set by the government. But some lenders waive some of the fees they are allowed to charge.