Unless you have $150,000 stashed away in a recession-proof safety deposit box, you are probably planning to borrow money to pay for your child’s college education. How much you should borrow depends on who has to repay the money and how they are going to do so.
If you, as a parent, are planning to pay off your child’s student loans, you need to discuss this with a financial advisor before you sign the papers. A $30,000 loan for college at 6.8 percent interest will mean a monthly student loan payment of approximately $345 a month for 10 years. The interest on the loan will be $11,500. This will be a total cash outlay for you of approximately $41,500.
Financial advisors are ...