What kinds of student loans are available?
The type of loan your student takes out can have a huge impact on his finances after graduation. Unfortunately, the terminology surrounding student loan products can be incredibly confusing.
"The irritating thing is that two different financial aid offices can refer to the same loan product differently," Lockwood says. "For example, 'direct loans' is the new term for Stafford loans, but not all colleges have adopted the new nomenclature."
While it's important to get a handle on the lingo, parents and students need to understand the terms of each loan product. That means understanding the interest rate, when repayment should start, and whether the rate is fixed or adjustable, Lockwood says. It's also a good idea to ask what happens if the student is unable to make the payment.
And, while most parents are likely to be involved in their student's financial aid process, they'll want to specify whether they'll be asked to co-sign for a student loan. If the parents do co-sign, they should ask about how they can come off their co-signing obligation, Lockwood says.