Borrowing Money From Family for College

Shakespeare is famous for his quote “Neither a borrower nor a lender be” when it comes to sharing money amongst friends and family. But for families in a crunch when it comes to college costs, borrowing from family members might be one of the few options available at a reasonable cost. How can you borrow from family and close friends without worrying about awkward Thanksgiving dinners if things don’t go well?

Make Informed Investments

Whether you’re the investor or the borrower, understanding the basic nature of the borrowing relationship is key. The investor has to have confidence that the borrower will be able to repay the loan, which means having a certain amount of confidence in the student, his/her line of study, as well as  future employment opportunities. For the student, this means making smart choices about what college is best, and what program to study, as well as being informed on the employment market, and being prepared to answer questions from the lender on those fronts.

Be Clear On Terms

Miscommunication can be the death of a good relationship; doubly true if money is involved. Before borrowing or lending, make sure that the terms of the arrangement are clearly spelled out in writing and agreed to by both sides. The lender may offer to reduce or waive interest during the study period, while the borrower may request the option of paying back some of the loan during the college years, based on summer employment income. Both sides should agree to an interest rate beforehand (even if it’s variable), and plan for contingencies such as if the student needs to drop out due to illness or emergency, if the student doesn’t graduate, or if the student fails to get a job quickly after graduation.

Agree on Boundaries

 Borrowing money from family is truly a case of mixing business with pleasure; pleasure which turns out to be a nightmare when things go wrong. In the age of Facebook, students can feel that family members are scrutinizing their every move, and it can be hard for family members to refrain from commenting “Shouldn’t you be studying?” after every social college outing. Agree on boundaries such as the student sharing end of year grades if the lender doesn’t nose around with family members to find out how the school year is going.

Borrowing from family can be a great way to solve a college financing problem; family can enjoy supporting the next generation of relatives, while students can benefit from better terms than from traditional lenders like banks and financial aid programs. 

College Credit Transfer Articulation - Save Money, Time, and Credits

Students may take college courses at one school and then decide to transfer to another institution. This is a common practice and there's certainly nothing wrong with changing colleges.

What many transfer students do not realize until late in the game is that not every course credit is eligible to transfer to another institution, or more specifically toward a particular degree.

For example, let's assume a student is going to take a couple of courses during the final semester of their senior high school year and a few more courses during the summer. This student's plan is to enter a different school in the fall as an incoming freshman.

Let's also assume this particular student's major is currently aimed toward obtaining a specific degree, such as nursing.

In order for these credits to transfer toward the nursing program at the final destination school, it is imperative that they meet the transfer articulation requirements. Laws vary among states, but the concept is basically the same.

The course titles and numbers offered at a local community college are going to vary from the titles and numbers offered at another school. The transfer articulation information helps a student decide which courses for a specific major will transfer, for example, from the community college to the state university.

After all, what's the point of working hard to obtain college credit hours if they won't apply toward your degree at your designation completion institution? Non-eligible credits are a loss of credit hours, money, and time.

Suppose one of the courses our example student enrolls in at the community college is PSY 200 "General Psychology." The institution where the student plans to pursue their nursing major labels the course PSY 201 "Principles of Psychology." The articulation guide shows the PSY 200 course to be eligible for transfer because both courses are one and the same, although numbered and titled differently.

Transfer articulation guides for many states can be obtained online. You simply provide a bit of information, such as both schools you plan to attend and the desired major. You can then print a list of the course requirements and their corresponding course titles and numbers that will successfully transfer.

This will prevent you from taking random courses that you might find out later do not transfer to your destination school, much less apply toward your sought after degree.

If you cannot find an articulation guide online for your particular state, contact both of the institutions involved and talk with the admissions offices directly regarding the articulation requirements that pertain specifically to your situation.