If you are considering co-signing a loan that allows your child to attend a higher-priced school, these four warning signs should make you think twice.
1. Poor academics in high school
Because some states now offer lottery-funded scholarship awards for students who meet certain academic requirements, admissions at many less-expensive state colleges have gotten much more competitive. But if your student is ineligible because he or she doesn't meet those requirements, opting for a pricier private school that accepts lower academic standards may be a poor choice.
"Community college is the way to improve academics for students who don't meet four-year state college requirements," says Cruze.
2. Questionable future earnings
Kantrowitz offers this simple formula for determining how long it will take students to pay off their loans: If total student loan debt at graduation is less than the potential annual starting salary, loan repayment will be possible in 10 years or less. For larger loan amounts, repayment times can be significantly longer.If the career's potential salary pales in comparison to the extra educational costs, borrowing more money is a questionable option.