Am A Student Loan Virgin - Help Needed

Paying for College
1

<p>OK - so... I've been reading, reseraching, preparing, etc... for the better part of a year, but things are getting down to the nitty-gritty and I find I'm an idiot when it comes to understanding loans - so many terms and numbers and my head is about to fly off its hinges. </p>

<p>Here are some specific questions...</p>

<p>Staffords & Perkins: </p>

<p>~ First step: Complete the entrance counseling & Master Promissory Note for Stafford loans ($3,500 + $2,000) and the Perkins loan ($1,200). My understanding is that these come directly from the government or do they come through a loan “clearing house” of some kind?</p>

<p>Loans Needed In Excess of Staffors & Perkins:</p>

<p>~ In order to take out the remaining amount in loans (after the Staffords and Perkins)– is there an advantage to applying for a PLUS loan - vs. - take an alternative/commercial loan (with me as a cosigner)? </p>

<p>PLUS Loans:</p>

<p>~ PLUS loans are required to be paid back after the final disbursement – does that mean that the PLUS loan for freshman year is required to start being paid back after the 2nd semester disbursement, which I’m guessing is in/around January? So, if we take out a PLUS loan each year, payments begin around January of each year? Do I have 4 loan payments beginning in January of senior year? Or one loan payment with 4 packaged loans in it?</p>

<p>~ The information on PLUS Loans and/or alternative/commercial loans says that we can borrow the cost of attendance, less financial aid. Do they include work study in that limit to the loan amount? Also – according to the website, indirect costs, including books & transportation can be part of that loan amount – but can health insurance and personal expenses be part of that loan amount too? Also – travel to/from FL is going to cost more than the $1,000 allotted by the cost of attendance posted online – is the $1,000 the limit that will be used by the PLUS loan configure-ers?</p>

<p>~ From the website: “All Federal Direct PLUS Loans have a 3% origination fee and a 1% default fee. However, you will receive an upfront rebate of 1.5% at the time of origination based on paying your first 12 monthly payments on time, so the assessed amount is only 2.5 percent. All fees are deducted proportionately from each disbursement.” I’m not sure that I understand what is meant by that lest sentence. Is the 2.5% fee deducted from the loan funds or is that due upon signing? It seems there are origination fees for all the loans. Is there a ballpark total for origination fees for freshman year?</p>

<p>~ Baring any significant changes to our finances, is my D likely to be approved for the same amount of PLUS/alternative student loans each year or is there a risk of hitting a limit and being cut-off from loan funds before the 4-5 years is over?</p>

<p>~If the Stafford/Perkins loans come through a loan clearing house, will the same group handle all of her student loans, including PLUS loans? If D's net loan cost is $10,000 per year – we’ll owe one loan company/clearing house $40,000 at the end of 4 years? </p>

<p>~ How do the loan accounts work? Let’s say she takes out $10,000 in loans (Perkins, Staffords, and PLUS/commercial) does half of that money automatically go into her school account at XYZ Univeristy at the beginning of each semester? Or does it go into a loan account held by that clearing house and disbursements are made to XYZ – or does D pay the semester bills from that loan account via check? </p>

<p>~ If we’ve budgeted travel, books, health care, etc. as part of those loans she takes out – do we take money out of the loan account and put it into a checking account for her to use for those expenses? </p>

<p>~ According to the website for XYZ University, the bill for Fall semester is mailed in July. Is that due in full prior to move-in and attending classes? If financial aid has not yet been received by the student’s account, how is that usually handled? </p>

<p>And Finally:</p>

<p>~ What questions am I not asking?????</p>

<p>Thanks to any in-the-know folks like kelsmom, swimcats, and others of that ilk who might be able to provide answers.</p>

2

<p>~ Baring any significant changes to our finances, is my D likely to be approved for the same amount of PLUS/alternative student loans each year or is there a risk of hitting a limit and being cut-off from loan funds before the 4-5 years is over?</p>

<p>Students are not approved for Plus loans…Plus loans are loans for Parents. Parents must qualify for these loans, and parents are financially responsible for these loans. This can be a huge problem because sometimes parents can qualify for the first year or two of loans, but then the child can’t continue his schooling because the parents can no longer qualify.</p>

<p>I am not in favor of Plus loans unless the parents are high income and have low other debt. Unfortunately, Plus loans are sometimes put in FA packages of low or mid income students. Their parents aren’t willing to borrow and/or can’t qualify to borrow.</p>

<p>Don’t let you child borrow more than the max Stafford amounts (which is about $30k total for all 4 years). Anything more than that will be difficult to pay back.</p>

3

<p>Perkins come direct from the school.</p>

<p>Before now Stafford could either be direct loans through the school or loans through private lenders. The recently passed bill makes all Stafford loans direct loans so they are processed through the school.</p>

<p>Half the loan is disbursed in fall and half in Spring. In our experience they go to the school bursars account. Any money left after all direct school fees (tuition and fees, room and board etc) is paid to the student. The timing will vary according to your school. (my daughter gets hers 2 weeks into the semester, my son’s school takes 5-6 weeks).</p>

<p>As mom2 said, PLUS loans are parent loans. In parent name,not student.</p>

4

<p>of course - yes, my apologies - PLUS loans are taken by parents. I think just typed “my D” instead of “my case” </p>

<p>I’m not high income $50,000 / year but I am low debt - just a mortgage.</p>

<p>Definately don’t want to take on too much debt. </p>

<p>So letting my D take the Stafford & Perkins loans (5,000 for freshman year + 6,500 for sopho + 7,500 for jnr + 7,500 for snr… $27K in Staffords alone - around $32K if she gets a 1,200 Perkins as well each year) is a reasonable amount of debt for a 4 year degree?</p>

<p>Jeeze… that doesn’t even get her through our cheapest state school - which would require around $5K in gap loans. </p>

<p>I was figuring on her taking the Staffords & Perkins - max of $32K.<br>
And then I would take $5K per year - max of $25K if there’s a semester-abroad.</p>

<p>All told, that’s $47K - $57K… ballpark it at $50K in loans for a bachelor’s degree from a v. reasonable state school - half for me to pay and half for her to pay.</p>

<p>swimcats - </p>

<p>So if, between her Staffords & Perkins and my PLUS loans, we take $10,300 in loans for Freshman year - the loan folks will disburse $5,150 to the school in Fall and the same amount to the school in Spring. If her bill is less than that amount, it goes to her in cash? (all 4 dollars of it!) </p>

<p>On the other hand, if she goes to the OOS private, she’ll need money for travel expenses, so I should take out, say $1,000 more than she needs each semester for flights? </p>

<p>Thanks to you both!</p>

5

<p>Ok…</p>

<p>What year is your D? Junior? Senior? Would she qualify for any scholarships? What is your EFC?</p>

<p>I don’t like the idea of a single mom borrowing half her salary. </p>

<p>There may be other options to keep loans down…such as scholarships, commuting to a local college (or CC) for the first 2 years, and then transferring.</p>

<p>If your D isn’t a senior, what are her stats? What state are you in? Are there any state schools that she can commute to?</p>

<p>Just to give you an idea of the impact on a $25k Plus loan for you…</p>

<p>Loan Calculator</p>

<pre><code>Loan Balance: $25,000.00
Adjusted Loan Balance: $25,000.00
Loan Interest Rate: 9.80%
Loan Fees: 0.00%
Loan Term: 10 years
Minimum Payment: $50.00

Monthly Loan Payment: $327.61
Number of Payments: 120

Cumulative Payments: $39,314.08
Total Interest Paid: $14,314.08
</code></pre>

<p>Note: The monthly loan payment was calculated at 119 payments of $327.61 plus a final payment of $328.49.</p>

<p>While $327 per month may not seem like a lot. That is like an extra car payment for 10 long years. You may have to buy a car for yourself during that time, too.</p>

6

<p>*
~ PLUS loans are required to be paid back after the final disbursement – does that mean that the PLUS loan for freshman year is required to start being paid back after the 2nd semester disbursement, which I’m guessing is in/around January?* </p>

<p>Yes. In my experience the first payment was generally due in March. I’d note that interest begins running at the time of disbursement – so I have generally started paying as soon as I received my first statement, starting by paying the accumulated interest even before the first payment is due. </p>

<p>Do I have 4 loan payments beginning in January of senior year? Or one loan payment with 4 packaged loans in it? </p>

<p>I’m confused by your question. “Final disbursement” means for the year. So if you borrow for the 2010-2011 school year, your first PLUS loan payment is going to be due around ~March 1, 2011. If you borrow again in 2011-2012, then in early 2012 the amount of payments will go up. I am not sure whether the new law re federal direct lending applies to all PLUS loans as well as Stafford – but assuming you have a Federal Direct lending PLUS loan, then it will all be serviced in the same place. You would have one payment per month to make, but it would go up each year as an additional loan was added to your account, and the payments would be allocated appropriately. You would be able to log into the lender web site – such as <a href=“https://www.dl.ed.gov/borrower/BorrowerWelcomePage.jsp[/url]”>https://www.dl.ed.gov/borrower/BorrowerWelcomePage.jsp&lt;/a&gt; – to see the status of each loan.</p>

<p>The information on PLUS Loans and/or alternative/commercial loans says that we can borrow the cost of attendance, less financial aid. Do they include work study in that limit to the loan amount? </p>

<p>Yes, work study is financial aid. </p>

<p>Also – according to the website, indirect costs, including books & transportation can be part of that loan amount – but can health insurance and personal expenses be part of that loan amount too? </p>

<p>COA is what the school financial aid office calculates – so you need to work with them if you feel that the costs should be revised upwards in your individual case. </p>

<p>Also – travel to/from FL is going to cost more than the $1,000 allotted by the cost of attendance posted online – is the $1,000 the limit that will be used by the PLUS loan configure-ers? </p>

<p>You need to look at the COA stated in your individual financial aid award, not the one posted on the web site - because schools do consider the individual student’s home when calculating transportation costs. However, I am not sure why the travel in your case would cost so much. Can you elaborate?</p>

<p>*From the website: “All Federal Direct PLUS Loans have a 3% origination fee and a 1% default fee. However, you will receive an upfront rebate of 1.5% at the time of origination based on paying your first 12 monthly payments on time, so the assessed amount is only 2.5 percent. All fees are deducted proportionately from each disbursement.” I’m not sure that I understand what is meant by that lest sentence. Is the 2.5% fee deducted from the loan funds or is that due upon signing? * </p>

<p>It comes out of the loan funds. So, for example, if you borrow $10,000, then the amount that is disbursed to the school is $9,750.</p>

<p>Baring any significant changes to our finances, is my D likely to be approved for the same amount of PLUS/alternative student loans each year or is there a risk of hitting a limit and being cut-off from loan funds before the 4-5 years is over? </p>

<p>The PLUS loans are for you and they are determined by COA less financial aid. The only issue that stands in the way of approval is your credit. </p>

<p>*If the Stafford/Perkins loans come through a loan clearing house, will the same group handle all of her student loans, including PLUS loans? If D’s net loan cost is $10,000 per year – we’ll owe one loan company/clearing house $40,000 at the end of 4 years? * </p>

<p>The PLUS loans are separate – they are YOUR loans, not hers. How they are handled in terms of payments can vary - but most likely all of your PLUS loans would be one account and all of her Stafford loans would be another. </p>

<p>How do the loan accounts work? Let’s say she takes out $10,000 in loans (Perkins, Staffords, and PLUS/commercial) does half of that money automatically go into her school account at XYZ Univeristy at the beginning of each semester? Or does it go into a loan account held by that clearing house and disbursements are made to XYZ – or does D pay the semester bills from that loan account via check? </p>

<p>Again, the PLUS loans are YOUR loans, not HERS. They are entirely separate. She doesn’t have to pay your loans, you don’t have to pay hers. The “P” in PLUS stands for “Parent”. The loan proceeds for each loan are disbursed directly to the college and will probably show up as separate entries on the bursar’s statement of account. </p>

<p>If we’ve budgeted travel, books, health care, etc. as part of those loans she takes out – do we take money out of the loan account and put it into a checking account for her to use for those expenses? </p>

<p>You will not see the “loan account”. The money will go to the bursar. If there is an excess over tuition and housing fees that the bursar collects, the bursar will refund the money to your daughter. </p>

<p>* According to the website for XYZ University, the bill for Fall semester is mailed in July. Is that due in full prior to move-in and attending classes?* </p>

<p>Yes. </p>

<p>If financial aid has not yet been received by the student’s account, how is that usually handled? </p>

<p>They – or you-- will subtract out the anticipated financial aid amounts. Usually you get a worksheet to send in with your bill to indicate the amounts subtracted out. So, for example, if you have a bill for $15,000 and you expect that your daughter will get a $6000 grant and that you will borrow $5000, leaving a balance owed of $4000 – you would note those items on the worksheet and send in a check of $4000. Most colleges do also offer some sort of extended payment plan that you can opt for – so in the above example, if you owe $4000 and you opt for the payment plan, you would note that as well, and then make the monthly payment to wherever you were supposed to do that.</p>

7

<p>Another note: I believe that Plus Loans must be re-applied for (and credit needs to be re-approved) each year. It is possible to be approved for X amount of dollars for the freshman year and turned down in subsequent years.</p>

8

<p>We are going to go to our local credit union and see what they can do. I am wondering if a line of credit based on our mortgage is a good idea. Any thoughts on that?
The Plus loans are scary.</p>

9

<p>Oh my goodness - ya’ll are fabulous.</p>

<p>Let me respond to mom2 first, then i’ll go back and digest cals wonderful response.</p>

<p>D is a senior in HS.
Accepted at several in states and several OOS - wonderful options - for which we are grateful.</p>

<p>Scenario # 1: Instate Top Choice</p>

<p>Tuition 5,112
Room 5,660
Board 4,000
Fees 1,000 (assigning same estimated fee amount to all school in matrix)
Books 1,000</p>

<h2>Health Ins 1,500 (manditory)</h2>

<p>COA 18,272</p>

<p>Scholarships 3,780 (renewable provided GPA/credit limits met)</p>

<h2>Inst. Grant 4,200</h2>

<p>Free Money 7,980</p>

<p>Stafford Sub 3,500</p>

<h2>Safford Unsub 2,000</h2>

<p>“Good” Loans 5,500 to be paid off by student</p>

<pre><code>18,272 COA
</code></pre>

<h2>- 7,980 Free Money</h2>

<pre><code>10,292 Total Cost
</code></pre>

<h2>- 5,500 “Good” Loans</h2>

<pre><code> 4,792 remains to be taken in “GAP” loans - taken in D’s name, paid off by mother
</code></pre>

<p>COST: So - that’s $10,300 in loans for freshman year. (11,300 for soph, 12,300 for jr + snr)
GET: An in-state lib arts education at a totally respectable school where they don’t specifically serve her intended major (journalism) - but majors change and lib arts is about experiencing things, so it’s all good. Honors program + honors housing is a big plus. In state - transportation negligible.</p>

<p>Scenario # 2: DREAM SCHOOL - OOS</p>

<p>Tuition 42,860
Room 9,280 (cheaper housing available 6,720 - uncertain if she’ll get it)
Board 3,400
Books 1,200
Fees 1,000</p>

<h2>Health Ins. 1,600 (possibly unnecessary- waiting to hear - could remove this)</h2>

<p>COA 59, 390</p>

<p>Arts Scholarship 15,000</p>

<h2>Inst Grant 25,000</h2>

<p>Free Money 40,000</p>

<p>Stafford Sub 3,500
Stafford Unsub 2,000</p>

<h2>Perkins 1,200</h2>

<p>“Good” Loans 6,700</p>

<p>59,390 COA</p>

<h2>- 40,000 Free Money</h2>

<pre><code>19,390 Total Cost
</code></pre>

<h2>- 6,700 “Good” Loans (taken abd paid of by D)</h2>

<pre><code> 12,690 “GAP” Loans (taken in D’s name, paid off by mother)
</code></pre>

<p>COST: 19,390 in loans for freshman year (estimating 20,390 for soph, and 21,390 for jr + snr.) NOT COUNTING TRANSPORTATION which would be another $1,500 per year ($2,000 estimate for freshman year because of need to fly up for orientation, parents weekend, and home for Thanksgiving - after freshman year, will likely not have those additional flights). ALSO DOESN’T COUNT HIGHER COST OF LIVING in big city - more expenses - yes? </p>

<p>GET: preprofessional education (journalism) in dream program (accepted as a freshman, one of only 50 or so), in a dream school, in a dream city. arts scholarship gives entrance into arts scholars group (one of about 40 or so) - so, 2nd dream program (acting) also represented. OOS urban living is also a dream come true, a life-style growth opportunity which this only-child of a single-parent needs.</p>

<p>Have appealed to OOS dream school and are waiting to hear. If they can give her an additional - what 12 - 13K - that would bring the 19,390 to 6,390 - adn then adding in the transportation and higher personal expenses of big city life - that would make the OOS “Dream” relatively equal to the in-state “perfectly fine” (a label I’m not taking lightly at all - it is, in point of fact, perfectly fine - she’ll learn and be safe and have a great time growing up and earning a BA. it’s all really good - just not the dream, which is fine if that’s what it needs to be.) </p>

<p>My concern is this - at present it’s all just numbers and estimates and loans and whatnot. What I really need to know is - what checks am I going to have to write and will I have the money for them when I need it? </p>

<p>Deposit at instate = $200 (already paid to get her a spot as it’s likely to be THE SCHOOL)
Deposit at OOS = $800
Orientation at insate = $150 + $250 in gas and hotel for me
Orientation at OOS = $250 + $250 flight (and I can’t attend 'cause it’d be too costly to send us both)
Move in Day at instate = $100 for gas and dinner out
Move in Day at OOS = $400 for 2 flights (D and me) + $150 hotel room for 1 night (night before)</p>

<p>That’s where the rubber meets the road, right?<br>
And scholarships and loans don’t help with all that, right? </p>

<p>Let me know if I’m not thinking this through.</p>

10

<p>Thank you SO MUCH calmom for your detailed answers!!!
SOOOOOO helpful!</p>

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<p>Got it - thanks.</p>

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<p>OK - good to know.</p>

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<p>I went online and pretended to book flights for all the breaks - would be around $1,300, if I’m remembering correctly, but there are several freshman year flights that would be extra expenses this year - flying her up for orientation, me flying up for parent’s weekend for freshman year, flying her home for Thanksgiving weekend (will probablymake other arrangements in other years - but for freshman year, I’d like her to have the option to fly home. Is that silly?)</p>

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<p>Wow! That’s a huge ding to the amount… I guess I should build in a cushion to the amount I’m applying for, not the exact amount, yes? </p>

<p>Is that fee per loan origination or per disbursement?</p>

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<p>OK - very good credit rating and very low debt - just a mortgage - so that bodes well at least.</p>

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<p>Right. Got it.<br>
I know I keep saying that the PLUS loans are hers - I understand that they’re not - not sure why I keep doing that. I think because the message I’m giving her is - that all of the loans are her responsibility to pay off. This is HER debt. Although the reality is that I hope to be in a financial position to pay off the “GAP” loans for her. (I guess I won’t have a choice - since these GAP loans - whether they be PLUS loans or commercial loans must start being paid back after the final disbursement! I stupidly thought that all loans for college don’t have to be paid until 6 months after graduation! Glad I got that cleared up!)</p>

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<p>So - I should not include budget for books and travel in the PLUS loan… I should handle those monies separately since she’ll need them when she needs them and may not be able to wait until the disbursement is settled?</p>

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<p>Whoa. That’s tricky. </p>

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<p>Is the payment plan something any of you take advantage of?</p>

11

<p>Oly -
What’s scary to you about the PLUS loans?
Just curious!</p>

12

<p>*>The PLUS loans are for you and they are determined by COA less financial aid. The only >issue that stands in the way of approval is your credit.</p>

<p>OK - very good credit rating and very low debt - just a mortgage - so that bodes well at least.*</p>

<p>That will be true for the first year, but each year you borrow, your credit rating will be injured so after the first or second year’s loan, creditors might not consider you as having “low debt.” </p>

<hr>

<p>Move in Day at OOS = $400 for 2 flights (D and me) + $150 hotel room for 1 night (night before) </p>

<p>You’ll probably have some extra baggage/shipment fees if your D will be bringing a lot of stuff. (You can get flights for $200 each? good!)</p>

<hr>

<p>4,792 remains to be taken in “GAP” loans - taken in D’s name, paid off by mother</p>

<p>12,690 “GAP” Loans (taken in D’s name, paid off by mother)</p>

<p>I don’t think these can be in your D’s name. </p>

<hr>

<p>Unless you can get that Dream school gap down, I don’t like you borrowing that much. </p>

<p>You will have other times that you’ll want to go to your D’s campus…such as Parents’ Weekend, etc. </p>

<p>You also have to figure that your D will have to fly home a few times a year…T’giving, Christmas, Spring Break, end of the school year.</p>

<p>BTW…is the Dream School an OOS Public? If so, it really isn’t worth this.</p>

13

<p>

</p>

<p>Keep in mind that interest starts running immediately on the unsubsidized Stafford. If your daughter (or you) does not opt to at least make interest-only payments during the course of the loan, then that $2000 will grow quite a bit over the 4 years before payments become due. </p>

<p>

Financial aid does not attempt to reimburse you for flights for “all” the breaks. I believe they are including one break only – winter break. The kids either stay on campus for holidays like Thanksgiving and for spring break, or are responsible for their own arrangements. If you or your daughter are not comfortable with this, then a college closer to home would probably be a better choice. </p>

<p>Also, you aren’t going to get a realistic picture of airfares trying to book too far out in advance. You’ll get a better sense of what it really costs by picking some hypothetical dates 3-6 weeks in the future. For example, last week I booked a nonstop, roundtrip fare from SF to NY for mid-May – $280. The best price available for the same trip next September is $320. The airlines just aren’t going to commit to discount fares too far out.</p>

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<p>Actually, you are better off if you strike some sort of balance between paying out of pocket and borrowing. Try to figure out how much you can pay out, max, on a monthly basis – in the last year of college that max amount should be enough to cover all loan payments, but in the first year the loan payments will be smaller – so some of that should be available to pay costs up front. </p>

<p>Do keep in mind that some at-home costs go down, depending on your daughter’s current activities and eating habits. So calculate how much you pay right now for expenses such as transportation to school & after-school activities, fees for any EC’s, food, incidentals, and any insurance premiums that won’t have to be paid if your d. is living out of state. (For example, check with your car insurance company as to whether she can be taken off the policy or kept on with a reduced rate). </p>

<p>Don’t borrow more than you have to. Keep in mind that you CAN apply for additional PLUS loan funds later on. That is, if you are eligible to borrow $8000 to meet the cost of attendance, and you think you can get by with borrowing only $5000 – but you find yourself running short for spring semester, you can still apply for any amount up the the $3000 you left lying on the table with your first request. </p>

<p>

It is one origination fee but it prorated with each disbursement. So basically each disbursement will be 97.5% of the amount you borrow. </p>

<p>

Be careful. It’s good to give your daughter a sense of a personal stake in her education, but a 17 year old brain just doesn’t seem to understand debt and budgeting in a realistic manner. Your kid has a rose-colored view of the money and what she will be able earn and afford after graduation - she has never had to pay rent, or budget for groceries. </p>

<p>My advice is to NEVER take on debt or co-sign for anyone else’s debt unless you understand that it is YOUR responsibility. You can <em>ask</em> your daughter to pay you back, but if you <em>expect</em> it or <em>insist</em> on it… you may find yourself in 6 years paying off a PLUS loan for a daughter who has cut off ties with you. (If you have a family member you don’t want to hear from again, lend them money – people generally try to avoid contact with their creditors as much as possible). </p>

<p>I mean… legally any debt you take on is your obligation, and it is the same as if you paid cash up front. If you want your daughter to pay you back, then set up a separate written agreement with her memorialized by a promissory note that specifies the total amount she will have to pay you back and when that will be. </p>

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<p>True – I don’t think you should borrow for any sort of incidentals. Does your daughter have a work-study grant? Why can’t she pay for her own books and incidentals from her earnings? (My kids always have - as well as for some of their travel home, depending on how frequently they chose to come home). </p>

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<p>I opted not to, but that was because I was making payments out of savings rather than current income. My daughter’s college charged a fee for the payment plan – I think $50 or $75 – nothing huge, but enough so that it did not make sense for me to try to stretch out payments.</p>

<p>Most years I paid about 1/2 from savings and 1/2 in loans. The final year I decided to skip the loans… but I’m filling a huge pinch because of that decision right now. (I’m o.k., but I’ve pretty much sapped all my savings at this point, and I’ve just been hit with the realization that I will be paying a lot more in taxes next year when I can no longer claim my d. as a dependent or file as head of household).</p>

14

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<p>It is not likely that your daughter will be able to get loans in HER name only. You will either need to cosign loans or take the loans yourself.</p>

<p>Re: dispersement of loans…they are dispersed by the term. If your child’s school is on semesters, they will be dispersed twice…once per semester. If your child’s school is on quarters (usually three per academic year), the loans will be dispersed three times…once per term.</p>

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<p>*I think because the message I’m giving her is - that all of the loans are her responsibility to pay off. This is HER debt</p>

<p>Be careful. It’s good to give your daughter a sense of a personal stake in her education, but a 17 year old brain just doesn’t seem to understand debt and budgeting in a realistic manner. Your kid has a rose-colored view of the money and what she will be able earn and afford after graduation - she has never had to pay rent, or budget for groceries. *</p>

<p>Cal mom is giving great advice here. A senior in high school might have “big eyes” for a dream school and agree to almost anything to get there. This is when the wise parent steps in and prevents 18 year old from making a life-changing mistake.</p>

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<p>No – not all families look at it this way. I am on the west coast, my daughter attends school in NY. I did NOT fly out with her for move-in day, I have never gone to parents’ weekend at her school – my d. has never been home for Thanksgiving or spring break. I did visit my daughter at her school once during her freshman year, and once in her sophomore year – but if money had been tight then that would be the first to go.</p>

<p>Families who are tight for money and who have kids attending far-off school usually forego frequent visits. </p>

<p>However, that brings up one other issue: if the kid will be living on campus, check to find out whether the dorms stay open during various breaks. Sometimes the housing rules leave the kid with no choice but to leave campus during breaks.</p>

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<p>Agree with Calmom. We’re on the right coast and DD is on the left. She got the equivalent of two round trip tickets a year…one in December…and the other during the summer. That’s it. I did fly out with her for move in/orientation…but haven’t been back there since…no visits, no parents’ weekends. She never came home on Thanksgiving, or spring break. BUT she knew up front when she chose this school that this would be the case!!</p>

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<p>i based the idea of extra flights on the OPs statement of…</p>

<p>*
On the other hand, if she goes to the OOS private, she’ll need money for travel expenses, so I should take out, say $1,000 more than she needs **each semester **for flights? *</p>

<p>Since she’s budgeting $2k per year for her D’s travel, it seems like she expects to see her D more often then just Christmas break and summer.</p>

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<p>ya’ll have given me much to think about - thank you so much!</p>

<p>multiple trips home is a luxury and would be one of the first things to go - i can see that. parent’s weekend would, i think, be a first year only kind of special occassion - like coming home for Thanksgiving. It did occur to me though that she probably doesn’t need a flight home at Christmas since her aunt drives from NY to FL every year for Christmas and she coudl stop in DC and pick up her niece and have a driving partner! </p>

<p>another thought is that the OOS private school has a tuition lock - so the tuition won’t increase for 5 years/10 semesters. that said, the housing - which seems to at least in part be dedicated (certain dorms for freshman, certain dorms for sophomores, etc.) does increase depending on which doors you choose - with increasing expense. D thinks she’d like to be an RA which may defray some of that expense, but can’t be counted on at this early stage in the game. </p>

<p>certainly - an 18 year old can have an immature view of debt/money/finances. she’s not making the decision about the dream OOS unless/until I tell her it’s a viable option - which it isn’t yet… waiting for appeal. I won’t put it on the table if it’s not a reasonable choice. i just wanted to think out loud about it to try to figure out how much more aid we’d need in order to make it a reasonable choice… i’m guessing $13,000 - which seems like a ridiculous amount to hope for. </p>

<p>thanks for helping me to define the details of what’s reasonable!!
:)</p>

<p>more thoughts welcome!</p>

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<p>But my point was that if finances are tight, then the choice generally is reduced travel and visiting, or a college closer to home. I mean – a lot of back and forth travel is a luxury, and I don’t think it is something that someone should borrow to finance. The debt load is high enough without borrowing more to pay for extras.</p>

<p>I do understand that many youngsters want to come home more often, and that many parents aren’t happy about the idea of putting their kid on a plane in August and not seeing them again until December. But that really should be a factor considered in college choice. </p>

<p>I mean… its tough enough to have thousands of dollars in debt to pay off because of the unavoidable stuff (tuition, housing). It makes sense to economize as much as possible on the frills.</p>