Boston College could soon go directly to our parents for our student loans

Who says just because you’re in college mom and dad still can’t pay?

With the increasing tuition cost, the amount of students in debt is higher than ever. The Wall Street Journal revealed on Tuesday that colleges and private lenders are pushing for solution: a loan that allows your parents to cover the tab.

This loan allows your parents to pay for your education without having to put you on the line. It mimics the federal program without the heavy upfront fee. This makes them a cheaper alternative and also more appealing for others to use.

SoFi ( Social Finance Inc.) in 2014 was the first to participate due to Standford University’s plea. College’s including our very own BC as well as Carnegie Mellon are referring parents to the loan.

One reason for the push from college’s is that this loan isn’t counted as part of the U.S. Education Department student debt calculation. This alleviates the pressure to monitor tuition increases since we’re in a time were student debt has become a political issue.

BC’s director of student financial strategies, Bernie Pekala, says the inclusion of parent loans in this calculation would make the school’s seem more expensive than they actually are.

Mark Kantrowitx, VP of Strategy at Cappex.com, told the WSJ that “Education loans in general, whether for students or parents, are spreading out of the cost over time; they are not cutting college costs”.

Parents get lower interest rates on these loans than the federal government charges. Many parents want to take on the debt themselves without burdening their children.

According to the Federal Reserve Bank of New York, the total student and parent college debt rose to $1.23 trillion at the end of 2015. This is more than double of eight years prior. In addition, according to Mark Kantrowitz,”The average student debt for graduates with a bachelor’s degree is projected to be $37,000 this year, up 78 per cent from a decade ago”.

This could have largely to due with the fact that the average annual cost of a four-year private and public school have increased significantly.

According to the College Board, the average annual cost of a four-year private college (including room and board) has increased by 53 per cent over the past 10 years to $43, 921. Four-year public schools went up by 61 per cent to $19,548 for in-state students.

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