It could affect your EFC too, since you are still dependent on parents for FAFSA.
Did you say your parents have a real estate investment company, with losses carried forward? That was indeed cruel of you to expect your parents to invest in you and your education when the returns on drywall and shingles are so much safer and easier to forecast. How dare you @philbegas! How dare you!
It’s been frustrating because they never set any aside for my (or my brother’s) college, which implies they never planned on paying for it, even when they had more money. In addition, my stepdad has an incredible amount of experience he could bring as a senior advisor or consultant, but his ego forbids him from ever working for anybody else. He’d rather be broke and self employed, than work for somebody else and make a lot of money.
I think it will be very difficult for your mother to qualify for a non-owner occupied home mortgage is she is also qualifying for a $0 EFC. If the FAFSA considers that she’s not making much based on the 1040 losses and carry forwards and credits and deductions, so will the bank for the mortgage. People who have $0 income have $0 income. Non owner occupied mortgages require at a minimum a 20% down payment if not more.
I don’t think you have a realistic plan.
It wasn’t my plan lol @twoinanddone it was her poorly thought out plan.
I just called her and she said in her plan I’d be paying zero down which means higher monthly payments. Jesus Christ my parents have no idea what they’re doing -____-
There is no zero down for a second/investment home.
It may not be your plan, but you are the one who needs one. You are the one who will need to figure out how to get $40k+, a place to live, transportation, etc. to go to one of the colleges on your application list. Your mother might be willing to borrow that as a Plus loan, but then it is in her name, not yours. I don’t see how someone with a $0 income on her tax return will qualify for a private loan (or as a co-signer). Even though you are independent and pay your own bills now, financial aid is not designed that way. You don’t want to take the cheaper avenue of California, so you are going to have to pay pay pay for your other choices, and I don’t see you being able to do that until you are at least 24 years old.
Ok OP- I’ll answer your original question- how much debt is a finance degree worth?
1- You have a lot of complications going on simultaneously. That introduces some noise into the calculation.
2- Your parents are either financial geniuses or somewhat financially illiterate. Either way it doesn’t matter- you cannot count on them for financial support. Agree with the poster above- if you get anything, be surprised and grateful.
3- You cannot predict or time the market. That means that you could go into big debt for BC and come out with your degree during a robust hiring period, get a really great job that pays a lot, and have your debt paid for within five years. So great decision. Or you could go into big debt for BC and come out during a terrible hiring period (ask the kids who graduated June of 2009 how many good jobs there were in finance- answer- about 80% fewer than there had been the June of 2008 before the crash).
4- Come back when you’ve got your offers in hand and we can help you sort through it. I think that a low debt education is a gift you are going to give yourself.
I owned investment property in Philadelphia for 15 years and sold it for almost exactly what I paid for it. The good news- the market didn’t go down. The bad news- no appreciation whatsoever. Taxes were high. Repairs and maintenance were high. A couple of very cold winters blew through the utility budget.
It is not for the faint of heart.
-I’ve only got full fin aid offers from Temple and Drexel, but since Temple doesn’t offer co op it might end up being more expensive :0
-I’ll add offers as I get them.
-You’re right about the cycles. Given the strange state of politics right now anything could happen before the next election cycle, which is around when I’d be entering the workforce anyways.
-And yes, I do apologize for how complicated the issue was. That’s why originally I tried not to offer too many personal insights - and I think that’s where a lot of the misunderstandings came from.
-As for your dilemma about my parents, I concur. I fail to understand their logic (or lack thereof). As I said, it has been very frustrating. Hopefully it will be simpler when I file the next financial aid cycle because I will be 24 next Feb 19th.
As for how to get a private loan - it’s like I said both my parents and myself have very good credit (I have a credit score of over 800 right now). But I think I might need to talk to my parents and get a head start on it because I don’t want to run out of time to figure out funding sources when the time comes to make a decision.
You can have a credit score of 800 but not have the income to meet the debt:income ratio required. Obtaining credit is not based only on your credit score. You, as the student, can still only borrow the Stafford loans and when you are 24, an additional $4000-5000 per year, so you are still looking at about $12k, max.
Phil- you can have perfect credit, and an accepted offer on a terrific piece of property in a neighborhood which is rapidly appreciating and STILL not be able to get a mortgage. Borrowers look at a lot more than your credit score, even with a secured loan (as in- if you default on the house they get to kick you out and sell it to get their money back). You are a much riskier prospect than someone just like you who is 40 years old and has 15 years worth of paystubs to validate the ability to pay the mortgage.
Listen to Twoin. Your debt for next year is the Stafford loan. Your parents may or may not qualify for more, but then again they may or may not be willing to take on more debt for your education.
@blossom When I bring up my credit I just mean I would be surprised if I couldn’t take out a small private student loan with my parents and I as cosigners. But I’m going to look into it starting ASAP so I know what my limit is. That way, when some offers come in that are simply more pricy I can just decline them and move on.
Your parents will need to be qualified cosigners for any loan they cosign with you. Their business “loss” and lack of income on their taxes could put this in jeopardy.
OTOH, your parents would probably be able to get a Parent Plus Loan in their name…if they can breathe and have paid their bills on time. Their credit score won’t matter AT ALL.
I’m going to have to tell my parents to look into it, because I need to know within the next month or so if they can’t afford/are not able to take on a parent plus loan.
I can’t imagine they won’t qualify for the Plus. But that is in THEIR name…not yours.
If they cannot take the Plus loan, you (student) will qualify for an additional $4-5k in Stafford loans. That’s going to get you to ~$12k, not to $40k.
Well I told my parents to look into it. Because if they won’t take on a parent plus loan, then we have to explore private options. What kind of interest rates are you normally looking at for private loans? I see it’s fixed-rate 6.31% for the parent plus.
^Actually, if they apply for the Parent PLUS loan and are turned down because of payment issues, you get an extra 4K in federal loans, which is much better than taking private loans.
I understand, but I’m just curious because if for example there’s an extra couple grand that still need to be covered I’m just trying to make sure I’m armed with all the right information. If it’s easier, somebody could link me to a good guide for learning about private loans a bit more.
You can look at the national private loan lenders - Sallie Mae, Discover, B of A. You might find lower rates at a local bank or one you’ve had a long term relationship with. Make sure you compare rates and origination fees.
Quick search shows Discover with 3.75-10.75% for variable rates, and 6.25-12% for fixed rates.
Sallie mae has rates as low as 5.75% for qualified borrowers, but at almost 12% for higher risk borrowers (no co-signer, no or low income).
Got it. For me that’d be AMEX or BofA.