It is the dream of many, hopefully most, young people to get further education after school and go to college. However, the cost of college tuition has increased steadily over the past several years.
The ability for the family to cover all tuition costs plus expenses including travel and accommodation has become increasingly difficult. Even with a regular savings regimen starting years before the son or daughter is expected to go to college, the current cost will inevitably be much higher than originally projected, and saved for.
Hopefully, there may be some opportunity for a scholarship or grant from the targeted college, but that is never guaranteed and can’t be predicted years ahead of time. Consequently, there is a growing need for financial assistance from outside the family, usually in the form of a personal loan from a bank.
I spoke with Teresa Gibson, vice president of Bank of Butterfield’s Consumer Credit department regarding a few questions and comments.
The bank recognises that a college loan needs to be affordable over a longer period to allow repayment terms suitable for both the student and the bank. The typical lending period is between one to seven years ahead, and discussion with the lending person at the bank will assist in that determination.
In most cases, information from the student’s parent or parents will be required, such as name, address employment, existing lending with the bank, comfortable repayment terms, current financial obligations, expenses and income.
The bank loan can cover the cost of the college tuition fees plus travel, accommodation and reasonable out-of-pocket expenses, considering that the intended college will most likely be outside of Bermuda in the US, Canada or the UK.
The bank also provides advice on how to manage your finances, including budgeting, saving, credit card control and general personal expense management. It is critical for the student, and for that matter, the parents, to have a full grasp of personal money management before taking out the loan, and especially during the term of the loan. Attention to cost control is essential and the bank will require regular financial updates over the course of the loan.
It is also advisable to not only have a good idea of which college you are going to well ahead of time, but also which courses you intend to take. And, of course, whether you will be accepted by the college entry process.
Getting a pre-assessment from the bank is a useful approach. Contact them in advance when you have a good idea of where you want to go, and the approximate costs of the college fees. Simply contact the bank and submit the necessary information to have the lending experts review the details and pre-approve you for financing, giving you some indication of your borrowing ability when you are ultimately ready to apply for college.
Leaving discussions with the bank until you are ready to go off to college is not a wise approach. The sooner you know what your options are, the better for you, your parents and the bank. Moreover, introducing yourself to the bank in ample time is a good idea.
Finally, note that Butterfield education loans can also be utilized for professional advancement, such as a masters degree, doctorate, or even a certification. The bank recognises that education for all sections of the community is a high priority, so regardless of your age, should you have an interest in further education, and need some assistance, talk to the bank.
For more information, visit www.butterfieldgroup.com, e-mail them at personallending.bermuda@butterfieldgroup. com, or call 298-4799 to speak to a lending specialist.
