student loan

Fed subsidized loans should be around 3-3.5% I think. Private loans will be 6% or so, but its increasingly difficult to get a private student loan.


I would try and take the cheapest route if it were me. Maybe he should try going to community college first, then transferring to a university. Or starting out at a small university and then transferring to a bigger. $40,000 on graduation is nearly twice what the average student graduates with. I'd also imagine the payments upon graduation after deferment are going to be around $400/mo, which is going to be hard to service for a fresh college graduate.

Kid needs to think long and hard before saddling himself with $40k in debt. He may better off learning a trade, honestly.

Can this kid get the pell grant?

If his parents only make 45k, he should be able to qualify for grants and if he has TOPS he could end up making money through college.

Make sure he fills out the FAFSA as soon as possible. That should let him know if he'll qualify for any grants. Definitely figure out the TOPS situation also.

It's a crummy situation to be in, but make him consider all options before he chooses a career based on affordability of tuition at a certain school. 2 years of community college before transferring to a 4-year school is a much more economical option. I think good degrees can still be had for good degrees can be had for under 40K. You just might not be going to Vanderbilt to get it....

kid is from texas, so no tops or equivalent that I know of in Texas. he has got a couple of oos waivers from oos schools that put schools on the same price basis as instate schools.


the ROUGH $10,000 annual loan amount was arrived at by assuming school cost (tuition, room & board, books and other exp.) of $23,000 less parent contribution of $5,000 ; Scholarship $5,000 ; pell grant $3,000. thus the CURRENT REMAINDER is $10,000.

Best advice is don't look at it as just a student loan to go to college. Look at it as an investment that will yield a return. Do some research into what you actually plan to do with your life. What does the future for that career field currently look like? What is the salary? What might my realistic monthly expenses be in a city where I would get a job?

The note after graduating would probably be around $300 a month. Not that difficult to swing. But my wife has her master's degree and a good bit more than 40k in debt and makes less than 50k. She'd be in a tight spot if she were living on her own. Not saying she'd starve, but I'm sure she'd be depressed about how much of her check she has to give to loans. If she were a chemical engineer or doctor, those loans wouldn't be anything. Over her career, it would totally be worth it. Hell, her current salary would be pretty nice if she didn't have to pay so much to her loans.

And this doesn't even include the curveballs of life. I can guarantee not many people think about the kids they are going to have when they take out loans. Or the house note. You are probably still going to be paying your student loans off when that stuff pops up. You are really going to want that $300 a month.

I'm not trying to scare anyone away. I think it's totally worth it. But only if you realize that you need to utilize the time to make yourself worth something. $300 a month is a small price to pay if you have the opportunity to make $10k a month.

anyone know what is the normal payback period on student loans?

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anyone know what is the normal payback period on student loans?

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10 years. But I would advise any student to look long & hard before assuming a major debt load (which I define as anything more than $10K over 4 years). It's a terrible idea to leave school owing the equivalent of a luxury car. It will limit his post-graduate choices, force him to chase higher paying jobs rather than following potentially more interesting career paths, and keep him in debt peonage during his 20s. Wouldn't he rather spend that decade embracing life rather than yoked to a debt?

With his parents' minimal income, he should receive substantial assistance from a private institution. It can be cheaper for a high achieving, mid-low income student to attend an out-of-state private than an in-state institution because of their generous financial aid packages. BUT, he's late in the game at this point (assuming he graduates in May). Unless he already applied for aid at the highly selective privates, he may have missed the boat.

Is he a first generation college student? If so, then you are doing him a wonderful service to guide him through this process.

But I urge you to seriously advise him to LIMIT his debt load. The 40K undergraduate debt means he will be less inclined to pursue grad education immediately after undergrad....and at this point, he has no idea what the future will hold. He might discover a burning desire to go to law school, or to get a PhD in history, etc.

What's wrong with 2 years at a comm college then a transfer to a highly selective private? Believe or not, highly selective privates LOVE transfer students. Inevitably, some of the folks admitted do not finish, and transfer students allow those schools to keep the tuition revenue stream at max potential in years 2-3-4.

Honestly, most people I know who tried to do the transfer thing, never did it. That's people trying to go to LSU from BRCC or from smaller schools closer to home. It can be done, and I know people who did. But a lot of people just lack the motivation and it's easy to get stuck screwing off in college.