There is a 1% origination fees, but that is taken from the loan proceeds. The interest rate is about 3.7 I think for this year (it will be announced around July 1 what it will be for next year). It runs from when the loan is disbursed, so usually half in the fall and half in the spring.
One way to cut down on the interest is not to take the loans until the end of the school year. Loans aren’t disbursed until April? Interest doesn’t start until April.
Would I have my kids take out this money to bank it? No. If it were subsidized then I would but not at even this low interest rate is it worth it to have money just sitting out there earning no interest but having to pay interest on it.
^^
Agreed, but, along the lines of what you mentioned…at least for sophomore year, if the student took the loan in, say, April to help with junior year costs, the interest would not be a lot more.
The idea of banking was made if the loans were sub loans.
That said, this is another reason why CC students should be allowed to borrow nothing for the first two year, but be allowed to borrow MORE for the last two years…
Our local cc costs ~$4k/year. A Pell grant might cover the tuition, but students need transportation to get there. It’s not always possible for families to share a vehicle. Not all parents have 9-5 jobs that make it possible to drop their child off at school before work. Some students are on their own to fund college. The federal student loan can help them pay for a used car and travel expenses. Taking the ability to borrow from cc students would affect primarily low income students and make college out of reach for them.
I totally get what you are saying, but by the same token a student who is getting 4k in Pell in NYS is also getting some TAP to help offset the cost of tuition at the CC.
We must remember that there is a limit on how much one can borrow as a dependent undergrad student. I would hate to see him on the back end without enough $$ to complete his degree.
I would love to see something like @mom2collegekids suggests. Since many public schools have a 5/6 year graduation rate, I would love to see students who did not borrow that freshman/sophomore amount ($12,000), have it available to them to complete school.
Or even if student were to use the 27k how they needed spread out over the 5 years (if they need 5 years to graduate) that would greatly help since 4 year public schools can cost considerable more than community colleges.
Do all states offer their own grants in addition to Pell, @sybbie719? I thought only a few did. I like the idea of having the loans available and allowing families to decide when to take them.
Actually, most states don’t offer things like TAP, Bright Futures, Hope, and Cal grant.
@sybbie719 yes…they have grants…but not ones as generous as Hope, TAP, Bright Futures, and Calgrant.
If you are on the low end of a TAP award (sliding scale), you will get $500/year, $250/semester as opposed to the DC Tag, where every eligible student gets $10,000 or Calgrant where every eligible student pretty much gets the same amount of $$ for Calgrant A or Calgrant B
Every state sets their own budgets for state aid (which comes from the tax payers). Some states have more to give than others.
There are states that are going through massive budget cuts
There are states like Tennessee, where community college is free
In NYC, community college is free along with book stipends and metro cards to low income students who are eligible for ASAP and receive at least $5 in TAP or PELL
Bright Futures and Hope (Georgia and Tenn) are merit programs, not need based. Colorado has a tuition assistance which is $75/credit and students in the Denver metro area get a bus/light rail pass as part of their student fees (worth $100/month or even more if you live in the burbs).
It’s hard to compare one state program with another because the costs at each state school is so different, the tax structures, the level of state support for the university system. My friend works for a state school in budgeting and he’s always telling me how much Wyoming pays per student (about $15k) as compared to Colorado (about $5k; he of course tells me the exact figure of $5143 or $5218 or some such number).