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Help me understand college student loan options
Posted on 6/3/24 at 10:44 am
Posted on 6/3/24 at 10:44 am
My oldest will be starting college next fall so we are beginning our college journey, as parents. After her scholarship is accounted for, she will owe about 17k per year. She is approved for around 5k in FASFA loans, which puts her at around 12k of unfunded cost.
What are our options and is FASFA worth it?
1)Does she take the FASFA loan regardless what she can get in private lending? IE: take the FASFA loan for 5k and get a private loan for 12k. So have 2 separate loans
2)Don’t take the FASFA loan and borrow the total loan from a private lender? IE: take out a loan for the full amount of the unfunded amount, 17k
3) Parent-Plus loan: not interested unless there is something I am missing: It’s her loan for her education, she should bear the responsibility overall.
I understand that the private loan won’t have the potential to be forgiven but are the rates lower? Is there a difference in the lenders? I was leaning towards SoFi so that she can open up a HYSA and auto pay her interest through the savings account so she can take advantage of the .25% discount.
Any help is appreciated, this is a new experience for us so trying to educate ourselves before making decisions. Thank you
What are our options and is FASFA worth it?
1)Does she take the FASFA loan regardless what she can get in private lending? IE: take the FASFA loan for 5k and get a private loan for 12k. So have 2 separate loans
2)Don’t take the FASFA loan and borrow the total loan from a private lender? IE: take out a loan for the full amount of the unfunded amount, 17k
3) Parent-Plus loan: not interested unless there is something I am missing: It’s her loan for her education, she should bear the responsibility overall.
I understand that the private loan won’t have the potential to be forgiven but are the rates lower? Is there a difference in the lenders? I was leaning towards SoFi so that she can open up a HYSA and auto pay her interest through the savings account so she can take advantage of the .25% discount.
Any help is appreciated, this is a new experience for us so trying to educate ourselves before making decisions. Thank you
11
Posted on 6/3/24 at 11:20 am to Bourre
Is the fafsa (direct) loan subsidized or unsubsidized?
Posted on 6/3/24 at 11:36 am to Dawgfanman
It’s a subsidized fasfa loan
Posted on 6/3/24 at 11:47 am to Bourre
quote:
It’s a subsidized fasfa loan
Take the max, this is a free loan while she is in school. No interest until like 6 months after school.
Posted on 6/3/24 at 11:56 am to Bourre
In-state option?
Non liberal-arts option?
17k after scholorships, yikes.
Non liberal-arts option?
17k after scholorships, yikes.
Posted on 6/3/24 at 12:16 pm to Bourre
if you expect the government to pull covid 20 then you go with FAFSA. interest on private loans was not paused like federal loans were.
Posted on 6/3/24 at 2:25 pm to Bourre
Definitely take the FAFSA, i had some subsidized loans that were like 2% interest.
I graduated in 2009 so some of my information is dated, but I feel like when i got loans the private side was shopped each year by Sallie Mae so you end up with different lenders servicers anyway.
I would try to stay nimble each year as opposed to locking in for all 4 years.
I graduated in 2009 so some of my information is dated, but I feel like when i got loans the private side was shopped each year by Sallie Mae so you end up with different lenders servicers anyway.
I would try to stay nimble each year as opposed to locking in for all 4 years.
Posted on 6/3/24 at 5:30 pm to Bourre
Is the 17 K all in for her expenses like housing, meals, transportation? If she can get organized and settled in her college routine, finding a job waiting tables or even better that is relevant to what she wants to do and pull in $1,000 a month it would be a huge difference in what she owes when she is done with school.
I worked summers and had a few jobs during school but mine was in state public school and I lived at home my first two years. My parents reminded me that me earning minimum wage was not as important as being done with my degree on time.
I worked summers and had a few jobs during school but mine was in state public school and I lived at home my first two years. My parents reminded me that me earning minimum wage was not as important as being done with my degree on time.
Posted on 6/3/24 at 8:04 pm to Bourre
So she’ll be starting out life with $70k of debt? Hope her degree will earn her nice money
Posted on 6/4/24 at 12:16 am to danilo
Federal loans always the best loans. Depending on what she does afterwards could get them paid off after ten years or 17k after 5 years
Private loans are the worst and should be avoiding
Parent loan shouldn’t even be listed as an option like you said it’s her loans not yours
Private loans are the worst and should be avoiding
Parent loan shouldn’t even be listed as an option like you said it’s her loans not yours
Posted on 6/4/24 at 4:40 pm to tigerbacon
Subsidized, try to get a job to cover the rest. Unsubsidized is last case scenario
Posted on 6/4/24 at 4:47 pm to Bourre
Can she not work a part time job, full time in the summer and pay the extra $17k. Why a loan?????
Posted on 6/5/24 at 7:42 am to Bourre
Went thru this recently trying to help a grandkid. Went fasfa, then I gave him a 0% loan for the rest. He is making $100/month payments while in college and we will revisit afterwards. We have a large family, lots of grandkids. Yikes!
While student loan forgiveness feels wrong, it is a shame that we do not provide low interest loans to students. They don't exist.. Also, price increases of college have been out of control for many years. The combination of these two things are quite the burden to students. A low interest government loan program would be a better way than loan forgiveness.
While student loan forgiveness feels wrong, it is a shame that we do not provide low interest loans to students. They don't exist.. Also, price increases of college have been out of control for many years. The combination of these two things are quite the burden to students. A low interest government loan program would be a better way than loan forgiveness.
Posted on 6/5/24 at 8:06 am to KWL85
quote:
While student loan forgiveness feels wrong, it is a shame that we do not provide low interest loans to students. They don't exist.. Also, price increases of college have been out of control for many years. The combination of these two things are quite the burden to students. A low interest government loan program would be a better way than loan forgiveness.
You could replace "college" with home prices, car prices, or the cost to startup a business.
Personally, I have more sympathy for those trying to buy a home or startup a business.
There are low cost options for college that kids do not choose.
Posted on 6/5/24 at 8:36 am to meansonny
Your point is valid. Everything is expensive. But this is specifically about funding college. What are the low cost options? Community college is less expensive, and an option for some. We discussed that for my grandson, but he ended up going to the state college in our area.
Posted on 6/5/24 at 9:22 am to KWL85
quote:
Your point is valid. Everything is expensive. But this is specifically about funding college. What are the low cost options? Community college is less expensive, and an option for some. We discussed that for my grandson, but he ended up going to the state college in our area.
State college in Georgia is free (paid for by the lottery).
The kids are only responsible for what every human being on earth is challenged with since the dawn of time: food and shelter.
That isn't an expense. It is reality.
Get a job. 2 or 3 over the summers.
Or choose the local state college so the room/board is at home with the parents/grandparents.
We have kids from our high school who earn money as a student (proceeds from scholarships when tuition/books/room/board are already paid for).
Go to associates program and transfer into the state college.
Or go to the state college and transfer into the expensive school as an upperclassman.
If I can't afford a tesla, I don't complain about the cost of a tesla with financing. I get what I can afford. Save up. And eventually get the tesla when I've earned the right to own one.
What happens to the cost of school when buying decisions are made with the idea of actual, real dollars?
Do costs go up or down?
What happens to the cost of school when buying decisions are made with student loan money? Or parents/grandparents money?
Does the cost of university go up or down?
This is an economics question.
Posted on 6/5/24 at 9:14 pm to Bourre
Absolutely do not do a private loan at all costs possible. They are 10% + interest rates, she will need a co-signer (you) and you’ll be attached to those loans until she builds credit, pays them off for a year on time, then will be able to release you.
Posted on 6/6/24 at 8:17 am to Bourre
What is the degree program she is interested in? I would be hard pressed to encourage my kid to start life 70k in the hole.
Posted on 6/6/24 at 10:22 pm to tigerfoot
Parent Plus is running at 8% interest and a 4.5% fee.at disbursement. This is for 2024 .
Posted on 6/7/24 at 5:31 am to KWL85
quote:
price increases of college have been out of control for many years.
Got to pay for all the “amenities” somehow.
It’s just dumb. We are in a college cost “bubble.”
It will correct. Birmingham Southern is closed. I expect many other small private colleges to shut down over the next decade.
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