Getting FA now or not?

Paying for College
1

<p>Ok, so I'm going to be going to MSU next year. </p>

<p>My parents have been saving for college since before I was born. As of now, I have app. 30k in my college fund. This will pay for a year and have a little bit left over. If I don't take loans now (my parents don't want to pay interest that they don't have to-we were offered a PLUS loan at $10,041.00 a semester and an unsubsidized Stafford loan at $2,750.00 a semester), will this affect my ability to get loans at a future date, aka sophomore-senior years. My EFC for this year alone is $27,252.00 and my estimated cost for attendance is $25,582.00</p>

<p>Thank you!</p>

2

<p>Your aid for next year won’t be affected by not taking loans this year.</p>

<p>Can your family pay the full cost of attendance for the rest of college? It looks like your EFC is greater than the institution’s COA. That means that you won’t get a cent of aid other than access to unsubsidized federal loans for you and PLUS loans for your parents. Your college fund will be gone in less than a year and a half. How do you and your parents plan to meet the rest of your expenses?</p>

3

<p>As of now, I have app. 30k in my college fund. This will pay for a year and have a little bit left over</p>

<p>I don’t know what your parents are planning to do for the following 3 years, but you might suggest this:</p>

<p>During the next 15 or so months, while they’re not paying for college out of current income, they should put XXXX dollars in a savings each month. Would/could they do this? If so, would they be able to set aside a full year’s worth of costs? If not, how will they pay for the remaining 3 years? Large loans? </p>

<p>What was in your aid pkg? You say that they were offered $20,000 in a Plus loan. Does that mean that you were offered a $5500 student loan as well? </p>

<p>Did you apply to any cheaper schools? If attending MichSt means that you and your family are going to end up with $50k or so in debt, why not go to a cheaper school? or go to a CC first and transfer? It doesn’t sound like you got any scholarship money from MSU at all.</p>

<p>Do your parents have any younger kids to put thru college?</p>

<p>What is your major and future career?</p>

4

<p>For soph year, you’ll be able to borrow $6500. That’s not enough for your second year. What are your parents saying about how those later years will get covered? Once the $30k is depleted, how much will they contribute each year.</p>

<p>You have to think about all FOUR years. you can’t just think, “hey, I’ve got next year covered; I’ll borrow for the other years.” You can’t borrow that much…and you shouldn’t. </p>

<p>*Yep! I had a 3.6 and 29 ACT with 4 APs (at the time of applying). You’d be more than set.
*</p>

<p>Did any of the other MI schools offer you any merit money? MSU gave you nothing.</p>

5

<p>@mom2collegekids </p>

<p>I applied to Western and Oakland, but I really didn’t like either of the campuses and/or their academic standing. MSU is the best fit for me, as far as that goes. I was in the running for the Medallion Scholarship at Western (only went to first stage), but I didn’t like the school overall.</p>

<p>The savings account sounds fantastic! My mom is currently unemployed but my dad makes just under 100k a year. I also have a younger sister, who will be a junior in high school next fall. </p>

<p>I’m going into the RCAH program, which is known for putting people in good grad schools or having good employment prospects afterwards, and I’m also interested in either economics, computer science, or media/information. The RC requires that people attend for 4 years; they are not known for doing transfers. </p>

<p>The only loans I were offered were the Parent PLUS and the unsubsidized Stafford Loan. </p>

<p>@happymomof1</p>

<p>I’m asking on this forum because my parents want to use ALL of the money up front, while I think it’d be a better idea to save/disperse it over time. I plan to work in school. As for my parents, their opinion is that I should take out loans for what I need to cover, but they WILL help me pay for college (though I’m not sure how much). I really don’t like the idea, but I don’t have many better ideas at this point.</p>

6

<p>There’s not much aid at the Michigan publics as you now know. I would simply sit down with your parents and ask them how the next four years will be taken care of. There is not an huge difference in costs between Western and State as it is. If the savings they have is depleted in year 1, the family EFC will go down slightly, but since there isn’t much aid to go around it may not change anything in the future years. It’s possible there might be some departmental scholarships in the future that you could apply for if you are a good student at MSU, but your parents should count on being full pay (minus your federal loans) for the next four years. I can understand their reluctance to take out a PLUS loan starting in freshman year, I have somewhat the same attitude. If we need it because of some unforseen situation down the line, we could take a PLUS loan at that point in time. We’ve “survived” two kids going through college and hopefully we can survive the next four years - but it’s out there if we need it. Perhaps your parents are thinking the same way and planning on tightening their belts so to speak financially and try to manage the costs. The best thing is to keep talking to your parents. BTW, I just printed my son’s MSU finaid sheet and there is nothing there but loans…so you are not alone. All my kids took the federal direct loans, also. We help them when they need help paying them back. That was our deal.</p>

7

<p>parents, their opinion is that I should take out loans for what I need to cover, but they WILL help me pay for college (though I’m not sure how much).</p>

<p>Are they aware that they will have to co-sign those loans AND those loans will still be outstanding when your sister goes to college? They won’t likely qualify to co-sign any loans that she would need.</p>

<p>your parents may not understand how this all works. They may not understand that you can’t borrow the costs for college, nor should you borrow that much. </p>

<p>Tell your parents that the following amounts are all you can borrow without them cosigning:</p>

<p>frosh 5500
soph 6500
jr 7500
sr 7500</p>

<p>I do think that you should take out this year’s 5500 loan. Work as much as you can over the summer…even if it means working two jobs…be very frugal. That will lessen the withdrawals from your college savings.</p>

<p>If you can save $3k during the summer, work a bit during the school year, borrow $5500 student loan, then that will be $10k that you won’t withdraw from your fund. That will leave more money for year 2. </p>

<p>Ask your parents how much they can set aside each month starting now. This is a good exercise since it will reveal how much they REALLY can pay for future years (and not just magical thinking). It’s one thing to think that a family can set aside $XXX per month, but it’s another to actually do so. Your family may soon realize that they can only set aside $200 a month. Well, that’s only $2400 per year. Obviously, that’s not nearly enough for those last 3 years. </p>

<p>You need to sit down with your parents, armed with the facts about your borrowing limits, and determine what the plan will be.</p>

<p>Is your mom going to return to work? Maybe going thru this financial figuring will encourage her to return to work - even if it’s only to bring in an extra $10k per year.</p>

<p>Even when you sister goes to college, your EFC will still be too high to get free money from MSU.</p>

8

<p>I just need to point out that the RC does NOT require that people go for 4 years. I could have easily graduated in 3 but I chose to stay for my 2nd bachelor’s. I have plenty of friends who graduated a year or a semester early from the RC.</p>

<p>I also had a friend who transferred in as a sophomore in to the RC from LCC. she was still able to graduate in 3 years from here.</p>

9

<p>Well, there is some logic in your parents’ plan. Interest on both PLUS loans (7.9%) and unsub loans (6.8%) starts accruing as soon as the loans are disbursed, so why start incurring that interest before you need to. But, I find it very concerning that you and your parents are jumping into this with the knowledge that year one is funded but a very vague notion of how to pay the remaining 3 years. Hopefully they will not be all paid for with loans - that is a pretty big debt.</p>

<p>The unsubsidized loan is a student loan in your name. The annual amount is very restricted - $5500 freshman year, $6500 sophomore year, $7500 the following 2 years. Remember these are annual limits and do not roll forward. i.e. even if you do not take the $5500 this year, your limit for sophomore year is still $6500. The PLUS loan is not a student loan. It is a parent loan that your parents will have the responsibility of paying.</p>

10

<p>@mom2collegekids</p>

<p>Can you explain the cosigning thing more? I wasn’t aware of the fact that they wouldn’t be able to cosign on my sister’s loans. Luckily, my sister is a MUCH more active/better student than I am (3.9 GPA, currently waiting on ACT, and will be taking 3 AP classes her next year, and she is also planning on going into interior design), so she will be eligible for more scholarships. </p>

<p>I AM planning on working this summer. Currently, I’m hired within my school district to work in their theatre (I do sound tech) when outside companies need to use it. Unfortunately, since it only pays erratically based on what gigs/who’s needed, I’m also looking at picking up a 2nd job at the local Subway (I know a friend there and she said they’re currently in need of more people). My theatre boss is flexible and understanding, so I’ll probably be able to take both and make my schedules for them work. It’s a long shot, but if I could work full time for the Subway, that’d be great.</p>

<p>I just talked to my dad about savings. We currently deposit $150 in my savings account every month, but since my parents are going to refinance their mortgage soon and also the fact that my sister is severely cutting her dance hours, this will leave quite a bit of extra money. He’s looking at boosting it to $300 a month. My mom cannot currently return to work, as she is a paraprofessional that works with autistic kids in schools. Needless to say, with summer coming soon, the spots are limited. It’ll be much easier for her to get work in the fall. </p>

<p>My money is currently in an MESP. I am at practically zero risk for loss right now, and my parents are expecting the money to go up to 40k by the end of sophomore year. My mom’s extended family will also help cover my costs, since my grandparents also put aside money for their grandchildren’s college. I also have bonds from my dad’s side of the family, which I’m going to look into.</p>

<p>@momofthreeboys</p>

<p>Thanks. It helps to know that there are people in the same boat.</p>

11

<p>@swimcatsmom</p>

<p>That’s exactly my parents’ logic behind it. </p>

<p>@romani</p>

<p>Well…I didn’t know that. I’m going to be coming in with over 40 AP credits though, so…</p>

12

<p>If that’s something you’re interested in, talk to Lizzy right away and chart out a course to graduate early. It’s pretty easy in the RC tbh.</p>

13

<p>@romani</p>

<p>Will consider, thank you.</p>

14

<p>Sejine -</p>

<p>What other Theater Tech skills do you have, and what contacts does your current boss have? Happykid is a tech/design major on call now at four different venues in the DC/Balto region as well as working with one of those bosses in his side businesses setting up lights for corporate events. She makes better money than I do. Good sound people are always needed, but if you can get some other skills as well (hanging lights, shifting set pieces, etc.) there may be more work options once you are settled in college. Do keep track of everyone you meet in the business because it is all about the contacts.</p>

15

<p>Romani, it doesn’t cost you $30k a year at MSU, does it (before your aid, of course)??? What is the realistic cost for a year?</p>

16

<p>While in the dorms, direct costs are going to be about 22k (assuming double room with most basic food package and 15 credits). With price increases it could be 23-24k next year (especially if funding is cut). Each credit is additional ~$450.</p>

17

<p>If you are committed to doing this, I would think that it would be wise to save some of the money for future years. I would suggest working like crazy over the summer & saving money to help pay for school, asking Mom & Dad to kick in what they can over and above the college fund, and taking out the $5500 unsub for the first year. If you move off campus after the first year … or better yet, if you can get a job as a Resident Advisor … you can cut down on costs for subsequent years. Work part time in school. Work every summer. You will want to make that $30k last, because otherwise you will get to the last year or so and have no money left, and no ability to borrow enough to cover the gap.</p>

<p>Another option is to do CC for the first couple years. It would really help. If you did really well in CC, you might even get a good transfer scholarship.</p>