My daughter just graduated from USC in May with no debt, due to a combination of generous scholarships and our early, aggressive savings plan. She will return this Fall to finish her Master’s Degree in Computer Science after working this summer. As a graduate student, she hasn’t been offered any scholarships so will need to take out student loans to cover her tuition and fees, which I estimate to be $18,441.
We have about $3,000 left in her 529 account, which will offset her tuition and fees.
So she will have to pay $15,441. She can get a Stafford Grad loan for $10,200, then needs to fill in the gap for the balance of $5,241. She will use her summer savings plus a TA-type Fall job to pay for her living expenses (she’s sub-letting another student’s apartment while on study abroad). If she passes her three classes, she will be done.
What would be the best type of loan (and from where) for her to fill in her tuition needs this fall? I think I will offer to help her pay ongoing interest since that keeps the loan balance from increasing until she can start paying the loan balance.
I’ve seen Graduate loans form Wells Fargo, Discover and Graduate Plus. Are there others out there that we should consider?
@thumper1: Although we are talking about a relatively small loan amount, I have not offered to co-sign any loans for her on principle. But for a small amount, I could possibly re-consider…It also looks like Grad Plus loans come at a relatively high interest rate so I don’t think that’s the best option she can get.
@4kidsdad: I believe that’s what the “Stafford Loan” refers to. Since DD is only attending for one semester, they are only allowing her to borrow half of the annual $20,500 limit, which is $10,250. I probably mis-typed the number in my notes. So that brings her gap down to $5191. Progress!
This won’t help you, but for others reading this, you could take loans out (esp subsidized) during the undergraduate years and save them for grad school. The interest rates are lower.
Actually, if she only has one semester to finish up the degree, she will be eligible to receive the full amount of the one-semester COA … and if it’s at least $20,500, she can borrow all $20,500 in a single semester (grad programs aren’t prorated for the final term the way undergrad programs are). Have her talk to the financial aid office (she’ll need to talk with an aid officer, rather than just a technician or peer counselor, since this is not a typical situation).
If you are comparing the loan programs, don’t forget to compare the origination fee too. I think the Plus loans have a 5% fee. Ouch. Because you only need $5000 and only for a short time, you might do better at your local bank or credit union for a small, unsecured loan. If she has a paid off car she could use as collateral, even better as the rate would be very low. Disadvantage is she’d have to start payments immediately, but really could be doable.
@kelsmom, I just spoke with USC FA and they said that DD can submit an appeal of her FA award, stating that she will complete her degree at the end of the Fall semester. USC will then forward that request on to the Feds. The person on the phone said DD has a good chance of getting the loan amount raised to the value for the full year.
Actually, USC will make the award based on the appeal - the feds won’t be involved in that decision at all, and they don’t have to okay it. (The person with whom you spoke probably doesn’t know quite how it works …)