Financial Aid from a Parent
Federal Parental Loans
The Federal government offers PLUS Loans for parents or legal guardians to take out loans for their child's college education. There is always a credit history check. Many private schools have extremely high tuition, and normal student loans taken out by the student may not be sufficient.
PLUS Loans usually require repayment as soon as the loan is taken out, just like any other traditional loan. This is where the loan is not as beneficial as a Federal Stafford Loan taken out by the student. With the Stafford Loan, or most other loans by a full time student, there is no repayment required until the student is out of school. In many cases, no credit check is required for the young student. Parents do not have this luxury since they already have a credit history.
Private College Funding for Parents
Private banks and organizations offer loans to parents. The loans are the federally insured PLUS Loans and personal loans. You don't have to go straight to the Department of Education to get a Federal loan. These private sources act as a liaison for the PLUS Loan and usually have similar, if not better loan benefits.
The PLUS Loan is not need-based, and you can usually borrow up to the cost of attendance or cost of education. There is really no need for getting a personal loan to pay for a college student's tuition and fees. As long as the parent or legal guardian is credit worthy, then the PLUS Loan should suffice. They are available for this reason, so that parents do not have to take out large personal loans for education.
Parents with Bad Credit
If you have bad credit, then a PLUS Loan may be out of reach. However, you are more likely to get a PLUS Loan with your bad credit before any other type of loan. The Federal government inssues the loan and they are less worried about you repaying than a bank would be. It benefits the country as a whole if more students attend college, where banks do not have any other agenda than pulling a profit from the student or personal loan.
