I have applied for a Sallie Mae loan to help pay for my
her education. Should I use the Parent Plus Loan to consolidate
my credit card debt?How will student loans affect my credit?Answer:

You can’t use a Parent Plus Loan to consolidate your credit card debt.
You and your daughter may need to borrow to continue
to finance her education.

In that case, you will want to look at educational loan options.

One of the most popular ways for parents to borrow for their children’s
educations is the Parent Loan for Undergraduate Students (PLUS)
loan program.

It is part of the Federal Family Education Loan Program (FFELP)
and allows you to borrow up to the difference between your child’s
educational costs and your child’s financial aid award package.

Parent PLUS loans carry a fixed rate of 8.5% and typically allow you
to pay back the debt over ten years. If you run into financial difficulties,
there are also some flexible repayment options
If you are not eligible for the PLUS loan, or you need to borrow more
than you can get that way, then you can look at a private parent loan.

These loans will carry higher interest rates, though, so you will want
to borrow carefully.

While student loans are fairly easy to qualify for, parent loans generally
require good credit. There may be additional requirements such as:

• 2 years of credit history,
• 2 years full-time employment history with the same employer
  or in the same industry and
• 2 years at the same residency.

Educational loans are reported on the borrower’s credit history as
a type of installment loan. Pay them on time and they help your
credit history, but if you fall behind, your credit will be damaged.

Unlike credit card debt, most educational loan debt cannot be reduced
or wiped out in bankruptcy.