That leaves parent borrowing, often in the form of federal Plus loans. It will be tempting to rack these up, come what may, to give a child a shot at attending a dream school. The cost, however, may be payments that last well into what are supposed to be your retirement years. Perhaps your children will help make the payments one day, but you won’t be able to refinance the loans into their names. “I talk to a lot of parents who call and want to refinance, and it’s clear that they never read the terms and conditions,” said Andy Josuweit, founder of Student Loan Hero, which helps people sort and consolidate student loan debt.
The steps above should help you avoid at least some of the confusion. As for the sadness and despair that can result from too much debt or picking the wrong college, that often happens when giddy families, acceptance letters in hand and nothing in the bank, make hasty decisions over just a few weeks in April. It is never easy to determine the prudent amount to spend and borrow, but you’ll have a much better chance of making the right decision if you start considering the options now.