Stanford University is following Princeton University in offering loans to parents to help them pay their children’s college costs.
Stanford, based near Palo Alto, California, will work with SoFi, a San Francisco-based peer-to-peer lender started by alumni of Stanford’s business school. SoFi will offer loans with interest rates as low as 3.16 percent for variable and 7.13 percent for fixed-rate, according to its website. The federal government has fixed-rate parent loans at 7.21 percent for the year beginning July 1.
While parents with typical assets and incomes below $100,000 are expected to pay nothing toward tuition at Stanford, some families are still having difficulty, Karen Cooper, director of financial aid, said in a statement. Stanford’s cost of attendance will be $62,801 for the next school year.
Princeton University is the only member of the eight Ivy League colleges in the Northeastern U.S. to offer parent loans. Princeton, with an $18.2 billion endowment, uses its credit worthiness to secure lower rates for parent, 4.3 percent for fixed and 1.2 percent for variable, through Bank of America, according to the New Jersey school.