Our D is the youngest. We’ve already accepted we’ll be selling the house to help pay for it, but we’re ready to downsize anyway.
@TexasMTDad - obviously no one should ever put their finances at risk to fund school expenses! But one thing about student loans - if you can’t afford to pay them you are still stuck with the debt. There is no “forgiveness” for parent plus loans other than at the extreme low end of income and even then you’re stuck with 12 years of payments. And the monthly amounts that you need to pay on an 8% student/parent loan are far higher per month than the equivalent amonts on a 4% mortgage. So if you think additional amounts on your mortgage might cause you to go over what you can reasonably pay… truly think twice and then think twice again about taking out a parent plus loan!
I’m 50 and I’m sure that many of you are younger, but I can’t compare how my college was paid for to how today’s kids have to pay. The average college tuition has increased by leaps and bounds over the average income increase since then. My sister-in-law who graduated from a public college in 1991 worked summers to cover her tuition and was able to graduate without any loans. There’s no way our kids could make a dent in college by working summers.
Part of the new tax plan included ending the mortgage deduction for certain people who pulled equity out of their home and used it for anything other than primary home repairs. This wouldn’t affect people who take the standard deduction, but could affect anyone who still itemizes as we do. Good additional numbers for people going the HELOC/home equity route to keep in mind when comparing costs. Although parents plus loans are so ridiculous that losing the mortgage interest deduction would likely still be cheaper.
@afterp89 this is the route I’m going as well. Waiting on financial aid packages from my D’s top choices is making me wish I had a house for each year!
I think as people are looking at their acceptances for Mt & deciding between schools, a huge consideration should be financial. But it seems to me like so many people blow this off. They are so concerned with a school that is better “name wise “ or w/ the prestige and are willing to break the bank or go into debt to send the kid there when , to confront the elephant in the room… MT does not have a great job record or a great return on investment. And we all know it.
When my D decided between her
acceptances we discussed the fact with her that we were not going to be taking out parent loans. That if there was a gap between what we could pay toward her college & what it cost that she would need to take out a student loan. But we also advised her of the consequence this has upon graduation. And that the payment is due in 6 months . And she may not have a job to pay it…or she will be able to pay it but do nothing else which would affect her auditioning and relocating , rent deposits etc.
Luckily she chose a school she was comfortable with MT program wise & was affordable for us and she will graduate with no student debt to speak of. Now she did change majors so if she needs to go extra semester then that may entail a very small loan but it will be little .
I really think everyone deciding on schools needs to really sit down with their kid and discuss the financial aspect. Esp if student loans are in the picture. Kids who are 17 and 18 are clueless about money for the most part. Some don’t even understand the concept of credit and the possibility of ruining credit down the road with unpaid loans .
We had a large amount of equity in our home and a low mortgage payment. We refinanced with a cash out option, payed down some debt and have enough to cover our portion of the college tuition after scholarships/grants. It was quick and easy and got a great rate. It’s a viable option depending on the amount of equity you have in the house.
@theaterwork I agree… My son and I have discussed what having $200K of college debt would look like on an actor’s wages. We have one option which could get him through virtually debt free… and are hoping for a good package from one other school. I personally don’t have the appetite to take on any personal debt but have the utmost respect for those of you who do. Hopefully we can make due with what I have saved (possibly subsidized by minimal student loans).
Yes agreed @TexasMTDad $200000…yikes! I do not mean to disparage anyone who takes out a parent loan. These decisions are personal family ones & for some people the parent loan works out & taking out student loans works out and home equity and what not. We were just not on board w/ that with my husband wanting to switch jobs soon etc. Luckily it wasn’t necessary for us.
I have no huge problem w/ small student loans, federal ones with the lower interest etc either. I mean having some skin in the game is def a good thing in terms of teaching some responsibility on financial matters to a college student. Having said that, when I heard recently what a friend of mine’s kid took out in student loans last year to go to a school that was chosen because it was a well known school, I wanted to be sick. I mean really, the mantra of “you only need one school” is not accurate. I dislike when people say that on this forum. Because that only applies if you love said school , are willing to attend for MT AND can afford it. Ideally you would have at least two options or more that are workable. I know it doesn’t always work out and the acceptances don’t come & then you are stuck…but if it were me and there was only one option and it entailed a huge loan I would seriously consider a gap yr to regroup.
And I stick to my statement, however unpopular, that you should NOT go into huge debt to a large degree for MT. It will be too great a burden to bear for the student. Yes, I know before someone says it , that there are other degrees this applies to as well. its just in theatre you are of course going to be most likely working a side job that is not well paying to start out & an even $250 a month payment could be crippling.
I don’t think I’ve heard anyone say that you should go into huge debt for a degree in MT @theaterwork. On the contrary, I think the abiding opinion on CC, especially for artists, is that large amounts of student debt will cripple a student’s chances of pursing an artistic career as a college graduate.
No, I don’t think anyone said debt is a good idea for MT", I just get the impression that some people are willing to incur a debt load if their student only gets accepted to one or two schools and said schools are out of their reach financially…simply because they want the student to go to a school for MT at all costs.
On another note luckily there has been a lot of talk regarding student loans/debt recently and perhaps that will help bring to light the ridiculous amount colleges charge for tuition. It continues to blow my mind. But I guess as long as people are willing to pay some of those enormous amounts then it will continue. Thank goodness for the affordable schools & schools that offer a lot of aid and scholarships to help out those who need it.
I just want to mention that many schools have payment plans for the portion the family needs to pay. The current semester payments are spread out over 4-6 monthly payments. We have been able to use this for DS#1 and it is available at DD#!'s likely college.