<p>I am terrible at budgeting and figuring out how to best pay for things. With that said, we just have not been able to save as much as I wanted to pay for D1's college. She received no financial aid as our EC is too high. We have had a lot of expenses, been relatively stupid with our spending habits, so no excuses. But, what to do at this point? We have enough to pay totally for 3 years of college. It is that last year that I don't think we have enough saved or will by that time. We will be about $15000 short in my estimation. She was only offered an unsubsidized student loan for this year which we did not accept. My question, should we go ahead and take the loan over the next 3 years which would then make-up for that shortfall I am anticipating? Because I am guessing that since they were only offering $5500 this year it will be the same over the next 3 years. If we wait until her senior year then there will not be enough available is my guess. But, please correct me if I am wrong. I don't want to get to senior year and realize there is not enough money. I am trying to plan ahead. She is the only one that will be going to college so no other children to pay for which is a good thing.</p>
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<p>You are very fortunate. You can fully pay for three years plus of college.</p>
<p>Have your child take the Stafford loans to make up the shortfall. She can even do so for this year…find out how to do so.</p>
<p>For freshman $5500…Sophs $6500, Junior $7500, senior $7500.</p>
<p>That will more than make up for the “shortfall” you are anticipating. In addition, your student can work during the summers AND during college which should also add to the pool of money.</p>
<p>Don’t forget to figure in increases to the Cost of Attendance! Since the Staffords would be unsubsidized, you may wish to consider paying off the accumulating interest while your child is still in school.</p>
<p>The loans are an option and good back up. But make sure that she looks at various scholaships available over the next few years. There are some out there that are only available to soph and over students. It may not cover the whole 15,000, but even a portion would help. Also, can she work a job in the summer to help too? 15,000 is not a terrible amount of debt to graduate with. You did not do as bad as you think you did with saving! Great job!</p>
<p>Go back and get those student loans your D was offered…it’s not too late for those for this year…(don’t believe it if you’re told differently).</p>
<p>EAch year, your D can borrow…</p>
<p>frosh 5500
soph 6500
jr 7500
sr 7500</p>
<p>That should help with your shortage.</p>
<p>But should I take out the loans now, when I will only need $15000 and that will not be needed until Senior year. Should I accept the loans starting next year? Thanks for all of the help by the way.</p>
<p>that was also my question today:</p>
<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1210470-differences-between-subsidized-unsubsidised-stafford-loan.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1210470-differences-between-subsidized-unsubsidised-stafford-loan.html</a></p>
<p>If you take the subsidized loan out each year, you will have more than filled your short falls. And at his/her graduation, if you have sufficiant fund, pay back as much as you can. or pay it on installment.</p>
<p>You want to start taking loans every year for at least 3 years to make up for the $15000 you are missing. You need to plan ahead and start accumulating that missing money now. They’re not going to offer you $15000 in full, so you have to plan and take it out now. You don’t want to take out a loan from a private source because the interest rates are often high and the payment schedules can be overly demanding. Interest rates on Stafford loans are good, and you can pay off the interest over the years so that it doesn’t accumulate. So take the $5500 loan, and the $5500 that you would have paid out of your pocket now goes back into the college savings to be used for senior year.</p>
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<p>The OP said they could fully fund the first three years of college. That being the case, they will NOT be offered SUBSIDIZED loans…which are for students with financial need. The OP will be offered only UNSUBSIDIZED loans. </p>
<p>And depending on their income level…that could very well be the case for the student’s senior year when they will have exhausted MOST of their savings. They still might NOT have financial need…and that is what gets you subsidized loans.</p>
<p>Have your D get a job. You can make $2-3k during the school year, and some in the summer, to make up at least part of that shortfall.</p>
<p>It’s much better in the long run than taking out the $15k in unsub loans.</p>
<p>With the kids out of the house, H and I are working more, and therefore making more money. In addition, you would be surprised how much money you save with your child not in the house. I would wait and see if you and your D can make up the shortfall in the next 3 years.</p>
<p>try to maximum utilize the various scholarship and other students grants…</p>
<p>I agree with thumper1.
Take out the stafford loan this year.
Divide your planned savings for the 4 yrs of college. That should be your anticipated budget for each year. She can plan to take the stafford each year. In the meantime, there is always her earnings from a job and possible scholarship opportunities, that may negate borrowing for any particular year. By the time senior yr comes, you may not need to borrow and if there is anything left over, pay off whatever you can. I wouldnt wait til senior year, things happen, things change. Plan now!</p>
<p>Since you’re only being offered unsub loans it doesn’t make much sense to take them now when you’ll only be incurring interest charges. Since your D may find alternate funding or ways to cut her expenses as she progresses (ie. jobs, RA, scholarships, moving off campus, etc.) I can’t see any benefit to borrowing now. You do have some time to think this over anyway and can request her loans later in the year if you decide to. If you are committed to paying her college expenses in full and leaving her with no debt you may find that other loan options are less costly than Staffords anyway.</p>
<p>I agree with those who say don’t borrow now. I do NOT recommend taking out loans this year. That makes no sense. If you think you will need $15,000 for the last year, there is plenty of time to save that amount over three years. Squirrel away a bit here & there … cut back wherever you can … have your child work in the summer … buy books used whenever possible … sell textbooks when done with them. You will be surprised how much you can save over the three years. When the time comes, you will know in advance how much you need. Since juniors and seniors can borrow $7500 unsub loan per year, that is $15,000 right there. Borrow the money as late in junior year as possible in order to minimize interest. </p>
<p>It isn’t wise to borrow money when you don’t need to do so. It is especially unwise to borrow unsub loans if you don’t need them. 6.8% interest adds up!!</p>