A parent, guardian, or other such sponsor takes the loan out in his or her name, receives the loan, and then disburses the loan to the student.

The loan differs from traditional loans, and even similar loans other banks may offer in that the parent or sponsor have 15 years to pay it off, and can opt for a 48 month interest-only payment. The loans do not have any early repayment penalties, often called windfall penalties. If you should obtain enough money to pay off the loan before it’s due, there is no penalty for doing so.

This loan can be filled out by any sponsor for the college student. Meaning if the student is going to an out of state school where another relative lives, that relative can take out the loan, saving some hassle. It could also prove financially strategic to allow a member with better credit scores to take out a loan, as the payments and interest rate would be lowest for individuals with stronger credit scores.

This loan is ideal for parents who not only want to be more involved with their child’s education, but can also be used to help teach students financial responsibility. The loan goes to the parent, not the student directly, which means that parents can either give one lump sum to their child, or gradually give them money as the student needs it, allowing for some spending control. Because it goes to the parent first, students can’t just blow it on something that seemed important at the time.

Wells Fargo Company’s Student Loan for Parents is available in all fifty states. Its flexible payment options, and no “windfall” penalties makes this a great option for many parents. It allows the student to concentrate on studying, and allows parents to take an active role in furthering their children’s education. The fact that anyone can help sponsor the student can make this an easier loan to take out, especially if your child is leaving the state for study. It makes it possible for other relatives to be able to take a loan out to help finance the cost of higher education, too.

Wells Fargo (NYSE: WFC) Announces Student Loans for Parents was created by and is property of American Consumer News.

Starting on June 4^th, there will be a new type of peer to peer lending targeted to college students. GreenNote is launching a national social networking service that will enable students to raise money to pay for school, regardless of their credit scores.

At first, it might seem unnecessary for this type of lending, because historically, most students didn’t have any trouble obtaining loans for education. Unfortunately, the state of the economy is affecting student loan lenders – particularly private loans that many students have to rely on if they don’t qualify for federal loan programs.

In previous years, many parents would take home equity loans from their homes to help finance their children’s higher education – but homes are no longer working as well as “cash machines” and it’s not as easy to get equity from your home as it once was.

Private lenders are charging interest rates as high as 20%, and the government has cut back on the amount of money they lend each year. On top of the difficulty obtaining funding to attend college, the price of collect itself is increasing.

Silicon Valley-based GreenNote is using the power of microfinance to allow students to receive affordable loans without a credit check, co-signer or proof of citizenship, while lenders earn a return on their money and the knowledge that they are making a positive contribution to the next generation. It’s extremely similar to how Prosper.com operates- except for the fact that it’s targeted to students needing money for college, and that it doesn’t require good credit. (Why? Because most students have not yet established a credit score or adequate credit histories that can be used to determine the level of risk). Loans through GreenNote tend to offer reasonable interest rates (about 6.8%) for students borrowing for college.

GreenNote is backed by Menlo Ventures, and has the former CEO at PayPal and Intuit on the team as well as executives from WBC Financial Group and Glenbrook Partners

Peer to Peer Lending for College Students? was created by and is property of American Consumer News.