There was a recent article in the Parenting section of the Washington Post. Basically, it was that the student had been accepted into his/her first choice but can’t go because can’t afford it. I guess I’m confused - I certainly understand parents not having full cash on hand and I understand not getting scholarships or that kind of aid, but can’t you as the parents or the students get loans for college, even if you make on paper, quite a bit of money? Or can you make too much to qualify for loans, either as yourself or the kid? If so, are you out of luck because you don’t have the cash saved and can’t take out loans? I’m not saying that taking out a lot in loans is a good idea or bad idea - but I assumed it was an option if my child got into a very expensive school, no matter what the financial aid package was from the school.
You know…some families (we were one) flatly refused to take out any college loans for our kids. We would not cosign, or take them ourselves.
We didn’t really have an affordability issue.
But there are families who just do NOT want to take $200,000 in loans out for,a kid to,attend a “dream school”. And in most cases, these kids have more affordable options.
It’s not CAN’T take out loans…it’s WON’T take out loans.
Lesdeux, does your family live in the most expensive home in your area and do you drive the most expensive car? If not, why? Loans exist for both houses and cars.
OP, if you want to take out $200,000 in parental loans it is your choice. Hopefully you will not come to regret it. Here are some terms you should become familiar with: delinquent, default, garnishment, delayed retirement. Also we may read about you years from now trying to get these loans dismissed through bankruptcy, not easy but if you appeal enough it may occur.
Read this:
http://talk.collegeconfidential.com/parents-forum/1870033-another-parent-loan-fiasco-p1.html
i haven’t read the article but this happened to us with our first kid (I’m being a lot smarter with the 2nd kid)…i didn’t really understand financial aid (as far as asset-counting went) and I just looked at our salaries and what top colleges said they would pay. On top of that, I became a lot smarter during the year but my kid had turned in almost all of her apps by the end of September…so too late. As a result, she had to take most of her acceptances off the table – from uchicago to tufts. It all worked out…but I completely see how it could happen.
(and no way were we taking out $100,000+ in loans 
we’re not even close to admissions process yet - and I agree, I really don’t want to take out loans or have my kids take out loans and don’t even know if we’d have to consider it. But IF my kid got into dream school, and we were say, 20k short due to not having cash saved and financial aid package from school being 20k short, I wanted to clarify that we or kid could take out loans for that amount IF we wanted to. That’s why I was confused about the article - it seemed to be saying there was no way child could go to the dream school because tehre wasn’t enough financial aid. And I thought that IF you were willing to take out loans, they would be available. Not saying that is a good option at all but people do it. I had to do it for law school, and yes it was painful, but it enabled me to go to my “dream school” 25 years ago.
Tuition at that “dream school” has since increased four times the rate of inflation…compounded.
Please encourage your kids to drop the “dream school” thing…and apply to a variety of schools that they like, and would be willing to attend…including ones that are affordable for your college budget.
That whole “dream school” thing guilts a lot of parents into taking loans they don’t want to take…to,fulfill some elusive dream.
Yes, in most cases the parent, not student, can borrow up to the COA of the college. The student borrows first, usually the Stafford loans, and then the parent borrows, either a Plus (government) loan or a private loan.
Some student may not have a parent willing to borrow, the parent may not qualify, or as stated above, the family decides it is just too much money. “No way” may be not willing even if there is a loan program available.
thanks twoinanddone - that was really my question - are loans still available, not debating the merits or lack thereof, esp. since my kids are not close to applying yet and have no “dream school” whatsoever in their cute little heads! I’ve been out of the game for a long time, so the article made me wonder if the whole paying for college thing had changed.
^^^It has but not in the way you are thinking.
Fortunately my daughter didn’t have a dream school. She thought she could do well and be perfectly happy at every school she applied to.
Loans are certainly available to everyone, at least to an extent. Any student can qualify for an unsubsidized federal student loan, regardless of financial situation, just by filling out the FAFSA. But those loans are limited to $27,000 over the course of 4 years. There are some additional loans, like Perkins,that will add a few thousand more a year. Most parents can qualify for a Parent PLUS loan - the underwriting standards are not particularly high. They don’t check income, debt ratios or ability to repay the loan - they just look for “adverse credit” events. If the parent is denied, the student can borrow an additional $4,000 a year. And there are also private loans available to parents and to students (although a cosigner is generally required if the student doesn’t have sufficient income). Finally, some schools will make loans to students. So many students have lots of loan options. However, borrowing that much isn’t a good idea, and many students and/or their parents are smart enough to realize that major undergraduate debt is not a good way to start out one’s post-college life.
Just because one can take out loans for school doesn’t mean he can AFFORD a school.
all good points. thanks everyone
beth’s mom nailed it.
There was one recent article about a student who couldn’t get loans - but that was because he and his family are undocumented immigrants and therefore not eligible for federal loans.
As said above, most families (combination student and parent) can borrow from the federal loan program up to the cost of attendance. Many, however, choose not to go into 6-figure debt and potentially jeopardize their ability to retire because of the debt they’ve incurred. Some students think nothing of demanding their parents take out $200,000+ in loans to fund their “dream school”. They even wonder why parents won’t drain their 401K to fund college. That’s why “dream school” can be a hot-button phrase.
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I guess I’m confused - I certainly understand parents not having full cash on hand and I understand not getting scholarships or that kind of aid, but can’t you as the parents or the students get loans for college, even if you make on paper, quite a bit of money? Or can you make too much to qualify for loans, either as yourself or the kid
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I thought you were a student when I read the above. Who can imagine a bank saying, “You make too much money to qualify for a loan.”
What you don’t seem to understand is that most parents can’t/ won’t borrow much or anything for college. Maybe because they have more than one child, maybe because they already have enough debt (mortgage/cars), maybe because they have poor credit, or maybe they want to be able to retire in the near future.
It sounds like you have more than one child. Are you willing to borrow $200k+ for each child? Are you willing to saddle your household with $4000 a month payments while you pay those off?
plus, some families may have the money “on paper,” but they don’t believe a $250k undergrad education is worth it for each child. There are a LOT of professions that don’t require a “fancy name” degree.
@beth’s mom and my kids went to the same undergrad …all 3 getting very large merit scholarships to attend. The remaining costs were quite low. They will all be quite successful even though their parents didn’t go into big debt or empty their savings accts.