That’s a very difficult thing to do without a full ride scholarship. A lot of merit aid we think are big scholarships are really just out of state tuition waivers, when you run the net price calculator. I found that out just recently doing college research for my teenage daughter. Room and board is not cheap either.
For a student to go to school on their own dime, community college is usually the best option, though not glamourous.
My FIL was first gen back in the day. His father, a successful businessperson, said he would loan my FIL the money to go to college—but with interest. My FIL graduated and paid him every penny owed, but it was always a sore spot that his father had charged him interest.
Throw in that inflation was as much as 17% in the late '70s, if I recall correctly. And it could be that the father was in need of the money.
I had an in-law uncle, who had a great nephew who went to the relatives in the '70s, I think, saying “I need you all to loan me the money to go to college.” That young man did extremely well in business, wound up very wealthy. I asked the elderly uncle whether the young man had ever paid him back. He said, “No, but I figure I’ve gotten my money’s worth out of it, because I’ve stayed at his beautiful house on Cape Cod year after year, for so many summers, for as long as I wanted. I got my money back, effectively.”
I just wish you had thought of that before you spent it on K-12!
Please don’t let your kid get saddled with thousands upon thousands of dollars of debt if they don’t have to. It will greatly impact her options in life, her stress, etc.
If you insist that she pay for her own school (or she has to for financial reasons), please have her live at home and commute to a CC and/or go to a nearby state school. Do not co-sign thousands and thousands of dollars in loans.
You asked, sorry that you don’t appear to like the measured and honest responses. No one is flaming you, but pointing out the real consequences to your child. Lots of great threads on schools that offer merit aid both private and public.
We do not expect our kids to pay. We hope to pay for it. I had to work to pay for college while at college (would not take loans) and I don’t remember it fondly nor did I do as well as I could have.
The PSLF will work to forgive her direct federal student loans but you don’t have to co-sign for those. Other federal (Plus) loans or private loans will not be forgiven by working for 10 years.
Also, she has to make 10 years of payments and those may pay off the qualifying loans.
Just be careful to know which loans qualify for forgiveness and what has to be done to get that forgiveness. Very few loans have been forgiven on the current PSLF programs. Some of the teacher loans programs are better at getting forgiven than just the ‘public service’ ones.
We have not taken loans at all so loan forgiveness is definitely not my expertise. However, my understanding is that if a loan is forgiven, the amount forgiven is considered to be income for income tax purposes. This can turn student loan debt into IRS debt. Hopefully someone will correct me if this has changed since I looked at it years ago. One tiny upside of this is that unlike student loans, federal tax liability can be discharged in bankruptcy. However, loan forgiveness plus bankruptcy to get away from IRS debt is a rather ugly way to get out from under debt. Choosing an affordable university is almost always going to be a better option, even if this severely limits a student’s choice of university.
We set a hard budget and made our daughters stick with it. They ended up with options that fit the budget and that provided very good education-related opportunities that they were able to take advantage of. Not having to work too many hours for money gave them time that they could use to take advantage of these opportunities.
If the loan is forgiven after paying for 20-25 years under the income based repayment plans, some programs do consider that taxable income. Also, that was the case if the loan was forgiven though the dept of education for inability to pay because of disability. Remember that not that many people have made it to 20 years of IBR so it’s hard to tell what is going to happen with those.
The PSLF was not taxable.
Many of the loan forgiveness decisions recently have made them tax free. There is big hope that if there is either a presidential order doing debt forgiveness for all, or if there is an act of congress doing debt forgiveness, they will also be non-taxable forgiveness.
Bankruptcy forgiveness, although rare, is also non-taxable.
Late to this thread. Best route: Go to a college for which she is clearly well above the typical student that goes to that college and be eligible for whatever merit awards that college offers. Students today cannot pay for their own college unless they are independently wealthy.
Or go to community college first part time while they work full time.
But residential four year college? I agree with @brantly . Not really possible For a student to fully fund this on their own.
I haven’t read the whole thread, but are any parents serious about having their kids pay for the full CoA. with no need-based or merit-based aid?
Or attend a service academy.
Of course, supporting oneself on a high school graduate job can be more difficult now than a generation ago; finding both time and money to attend even an inexpensive community college on top of that just adds to the difficulty.
The often-assumed living with parents is a receiving a form of parental subsidy, so a student doing that is not paying the entire cost of attendance on their own.
Whatever you decide, please don’t pass additional debt to your daughter in the form of co-signed loans. That’s the biggest debt trap in college, and can compromise or even jeopardize her future. With private schools, merit aid seems to be a clever loophole. They often love to make students think they’re getting a big scholarship, but in reality, they’re getting a below average financial aid package. It pays to shop around.