Nitro Knowledge. Your Guide to Paying for College.
If you’re in college-funding “crunch mode” right now, you’re not alone. A recent study reveals that late spring — in other words, right now — is when most parents feel the pressure to get their children’s college funding plans tied up for the fall.
In our survey of over 2,000 parents, 51% reported that they plan on finalizing college funding by June, and that includes securing private student loans.
Are you on track?
Let us break down what you need to know to nail down college funding now.
When it comes to interest rates and student loans, most people know one thing: a lower interest rate is better than a higher interest rate.
While that’s certainly true, it’s probably no surprise that there’s more to an interest rate than meets the eye. Digging into the fine print can reveal ways to pay off your loan faster — and it can also expose the landmines that could end up costing you additional money.
So today, let’s ditch the “bank speak” and talk like humans. Let us give you the scoop on how interest rates can work with you or against you.
How much is too much when it comes to student loans?
That can be a hard question to answer, especially when you’ve never dealt with student loans before. Generally, keeping loan payments under 15% of your expected post-graduation salary is preferred, while going any higher than 36% can be risky. (To calculate these numbers for your school and major, use our free NitroScore tool.)
As a parent, you'll explore all avenues to find funds for your child's college costs. Family savings. 529s. Investments. Maybe even your current paycheck. But if all these fall short, is it wiser to make a 401(k) withdrawal or opt for student loans? There are many factors to consider.
If you’re new to the college funding process, you may find it overwhelming. You may be looking into multiple sources of funding, only to find that none of them supply the amount of money that you’re going to need.
That’s not unusual. In fact, most use several different sources of funding when paying for college.
But keep in mind that not all funding sources are equal. As you create your college funding plan, there’s a hierarchy you should follow. Securing the right funds in the right order can make paying for college a lot less painful.