Creative Loan Options for College

There are many traditional loans that are available for college funding. There are federally funded loans and privately funded loans as well as loans that are directed towards the student pursuing a certain degree. There are, however, some things that you might already have in your possession that might provide some loan options for college that you haven’t yet explored.

Sometimes, parents may have what is referred to as “whole life” insurance. These policies are paid over a period of years and are used to build savings for the long term to help with emergencies and the needs that premature death brings to families. The cash value in these policies can be used to help fund your college education if your parents are agreeable to this. You will need to discuss ways to put the money back into this plan if that is the desire of your parents, as well.

Sometimes through employers, your parents will have been given opportunities to invest in retirement plans. There are different kinds of plans, but for our purposes, we are looking at the money that is in those plans. It is technically money that belongs to your parents that is earning more money for them for retirement years. However, there is also a way to borrow that money and repay it through special loans set up through their human resource departments at work. If they are agreeable to using that money and paying it back into the account, a loan can be set up for this purpose that will be less expensive than a privately funded loan. Usually it can be set up through the retirement fund and the repayment can be deducted from your parent’s paycheck. If your parents want you to repay the loan, you will need to work that out based on when you can begin paying them back and how much you can pay.

If your grandparents or other family members have been saving through whole life insurance or retirement funds, you might talk with them about investing in your college education and allowing you to pay them back, as well.

In either of these cases, your goal must be very clear – to pay these back. You can get loans to pay for a college education but your grandparents and parents can not get loans to finance their retirement years. Many times, the misuse of a family member’s money can cause great division in the family. A family is much more important to your future well-being than is a cheaper loan. If these loan options are offered or used, treat them with care and be sure to pay them back in a timely manner.

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