If you are a parent, consider a Federal PLUS loan, before co-signing a private loan (such as the Villanova University Loan). Federal PLUS loans offer more favorable interest rates and repayment options.

Adding your name to someone else's debt on a private loan is a very serious financial step. Here are some things to consider before you co-sign a loan:

• When you co-sign a loan, you are signing a legal contract. If the borrower does not repay, it can be reported on your credit record.
  
  
• If the primary borrower gets behind in payments, the lending institution can hold you and the borrower each equally responsible for repaying the entire debt. If it goes to a collection agency, the agency will try to collect from you.
  
  
• Even if the loan is repaid on time each month, another lending institution may consider the amount of debt that you have co-signed when determining if you already have too much credit.