Parent Plus Loan
• Higher interest rate, higher loan origination fees and 10 year amortization schedule make this a less attractive option.
• Death and disability provisions make this worth considering depending on the age and health of the parent(s) involved.
• Still more attractive than credit card financing.
401k Loan
• 5-year amortization schedule makes it least attractive from a cash flow perspective.
• Rules and regulations related to any change of employment make this a more restrictive financing option.
Bottom line—finance college and fund retirement. Financial advisors can play a critical role in helping families navigate their cash flow and financing options as it relates to paying for college.
Beth Walker is the founder of the Center For College Solutions.