Is this a good financial aid? Or should I transfer?

<p>With the college I attend now, I have recieved a pretty generous grant, work study, and student loans. </p>

<p>Mine is $5500 which I pay after I graduate.
My parents for this 2010-2011 year have $14,000 because we have the Direct Plus.
So basically they have to pay monthly for 10 years until the loan is fully paid ( with interest). </p>

<p>If that is the type of loan that I recieve every year I attend this college I will be in at least $78,000 debt ( even though the larger loan is for my parents OFCOURSE im going to help pay for it since i have a younger sibling who will attend college in 2012). </p>

<p>This was my dream school and my reach and initially i was waitlisted. We had a financial advisor who said it was a good deal... let's just say with the financial aid I recieved.. I am paying less at this private college than I would at my state university. </p>

<p>But is the debt worth it? I plan to work summers and school years and help pay it off, but I am not very sure. </p>

<p>I am not super rich. If i attend my state university... I can always commute so we do not have to take loans but if I stay... then i may have to take loans ( but less debt?). </p>

<p>Please help... </p>

<p>Thank you for any advice.</p>

<p>How can this be less than your state school? With $20k per year in loans (and it will go up) plus work study, commuting to your state school has to be much cheaper.</p>

<p>That’s just crazy debt for undergrad.</p>

<p>Well, presumably your parents will be able to take the AO tax credit, which is worth up to $4K I think…so that may give them some relief or enable them to pay off part of the loan with their refund. Are you working now and did you work last summer? Are your parents funding any of this through savings/current income or is it all through loans? Without knowing more about their financial picture, it’s difficult to say.</p>

<p>Your EFC should go down by roughly 50% when your sibling enters college (so when you file FA forms next year, the number in college will be 2). If your school increases your grant aid based on that and your sibling receives a similar package, your parent’s debt load may not increase substantially. In the meantime, I would look for opportunities to reduce costs wherever possible and to increase your own income. For example, you might investigate the RA selection process, off-campus housing (if allowed), request workstudy, etc. You should talk to your parents if you’re concerned that your college choice will impact your sibling’s ability to attend.</p>

<p>The question is…does your current school guarantee to meet your full need? If so, you should see an increase in your aid when your sister is in college at the same time as you are. If NOT, your school might not give you any extra financial aid at all.</p>

<p>Only you and your family can decide if the finances don’t work. Sometimes parents are willing to take out loans as their part of funding college costs (those PLUS loans…$14K this year, right?). The question is, will they still have to take out loans to pay for you to attend your local public university? Think of any other added costs too (commuting isn’t free…will you take public transportation, will you need a car, etc). </p>

<p>If your parents are paying $14K plus your $5K for college, then it is less costly than residing ON campus at a state university. BUT if you lived at home, the costs would be tuition/fees/commuting costs/books/personal expenses. Should be less than $19,500 a year, I would think.</p>

<p>Still…your parents may feel that $19K or so per year is well worth it for a school that probably costs close to $50K full costs. So…discuss this with them.</p>

<p>

AO tax credit is only $2500.</p>

<p>Thanks swimcatsmom, I didn’t check it and always get all those Ed deductions/credits muddled…still, $2500 isn’t too bad. Can they take another deduction as well for interest on the Plus loan or is that just for students?</p>

<p>You probably got the $4,000 figure from the fact that the credit is on $4,000 of qualified expenses, but it is on 100% of the first $2,000 and 25% of the next $2,000. Usual weird gvmt rules.</p>

<p>I am pretty sure it is only the parents that can take the interest deduction on the PLUS loan, as the loan is in their name.</p>

<p>Oh yes, that’s right! I had read it over last year but we’re in the “enviable” position of having to pay taxes on excess grant/scholarships, so no tax credits here! What I meant about the SL interest deduction is does ParentPlus loan interest qualify for the deduction and is it another of those weird things to figure out (like you can’t use the loan for room/board, etc.). As you can tell, I hate Pub 970 so I just rely on you for info :)</p>

<p>They can deduct interest up to $2500 as long as their income is within the income limits. Interest on loans (there are some rules about loans - not from family members etc) used to pay qualified education expenses is eligible. The qualified education expenses include Tuition and fees, Room and board, Books, supplies, and equipment, Other necessary expenses (such as transportation).</p>

<p>As with some of the other education tax benefits the cost of room and board can be up to the allowance for room and board included the cost of attendance (for federal financial aid purposes) if a student is off campus, or the actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.</p>

<p>thank you guys for the inputs! I have already applied to my state school as a transfer just in case… it seems more and more liklely that I may have to transfer… </p>

<p>my parents did save! but only my dad works so it is a single parent income… my workstudy job is only $8 and I am applying for scholarships! I hope things work out… </p>

<p>I know I sou nd like I don’t know anything and that is because I do not. My parents told me not to worry about tuition and costs and they said they will handle it… but i started to look in to things more… and now I know things they have not told me. </p>

<p>Also I am performing very well in this college at the moment… idk how I will do at my state uni but … idk how things will turn out.</p>

<p>—I am paying less at this private college than I would at my state university. –</p>

<p>Huh?</p>

<p>Wouldn’t commuting to Rutgers with a major in the sciences be about $14,000 a year.</p>

<p>How is that less than the loans you and your parents are using to pay for Bryn Mawr, which you broke down as $5500 for you and your parents 14,000 plus loan.</p>

<p>Bryn Mawr is probably giving you a lot more money than Rutgers would, but does does not mean that Bryn Mawr would cost you less than Rutgers.</p>

<p>sk8rmom-
re: the AO tax credit and paying taxes on “excess” grants and scholarships over the amount of tuition and fees –
IIRC (but you should double check older threads here where this was discussed), the best way to handle the combination of these two issues can be to have your kid pay the income tax on the excess scholarships/grants. Depending on the amount of the schols. and your child’s other income, your child may still be below the zero bracket amt for a single person and owe no tax. Even if tax is owed, your child’s tax rate is very likely to be lower than yours, plus not much will subject to tax after the zero bracket amount is subtracted out. I’m not positive on this, but I think that the amount of excess schol/grant $$ must be considered as the child’s income anyway, not the parent’s.<br>
But as long as your child still qualifies as your dependent for tax purposes, YOU, the parent(s) are eligible for the AO tax credit, as long as you paid the required amounts for tuition/fees/required books, EVEN if that amount was from loans that you had to take out.</p>

<p>(and, hey, if you the parents didn’t have to pay anything toward your kid’s COA because he/she received essentially a full ride, then you ARE in an enviable position. Otherwise, check earlier threads here (last summer or last year) where parents discussed parceling out the expenses between kid and parents like I mentioned - the amount the parents pay out of pocket or via loans counts as <em>tuition/fee/required-books payments</em> for the tax credit, kid pays tax on at least part of the aid package, which gets counted as “room/board” payments and therefore “excess scholarship $$”. Crunch the numbers - unless the scholarships/grants are specifically designated as being for tuition, it is perfectly kosher to parcel out the funds the way you wish for bookkeeping/tax purposes. You may come out ahead.</p>

<p>If anyone here has done this, or can remember where this was discussed, could you help us out here?</p>

<p>I just pay my dependent student’s taxes for scholarship money received over tuition and fees, in other words, the taxable part of the scholarships. With books now eligible for credits through AO, it is not unusual to get one thousand or so in credit just for the books. Very unlikely that what kid owes in federal and state taxes would be more than five hundred dollars on even something like six thousand dollars in taxable scholarships.</p>

<p>Another great thing about AO credit for people receiving full rides is that you can take two or three community college classes in summer virtually for free for the 2010 and 2011 tax years. In my state, nine credits of cc classes costs only about one thousand dollars. So one thousand for books and one thousand for cc would be possible to get one hundred percent back through AO credit. A great way to get some transferable requirements out of the way or get more hours to meet requirements like the 150 credit hours needed to sit for the CPA exam. This assumes your fall/spring school gives you at least a full tuition scholarship and the student attends cc in summer with no scholarship. The cc sends you a 1098 showing the tuition you paid and, of course, no scholarship money.</p>

<p>Momcat, doesn’t matter that the school gave enough money to pay for the books; it is treated as if the parent or the kid paid for the book out of their own funds, and you and kid choose the most advantageous way to claim the credit.</p>

<p>if u think you can pay the debt once u get a job than its worth it but if u would continuously b thinking about the debt during ur college than u wont b able to concentrate on ur studies so decide wisely. u can also apply for scholarships…gud luck</p>

<p>Thank you MomCat2 (and bthomp & swimcatsmom)…I didn’t recall that room/board was a qualified expense for any of the tax deductions/credits, but do remember that thread and will bump it up for this year’s discussion when I find it! I did put the excess on her taxes last year and paid the tax for her…IIRC it was around $100. She took 2 extra classes over the summer at her home school and 2 at other schools over the course of the year, but since all the SUNYs have low rates her total qualified expenses are still $4.5K less than her total scholarships/grants and she earned almost $4K from work. Believe me, I’m not complaining and will gladly pay her $150 tax bill for the privilege of not taking parent loans!</p>

<p>What was your EFC? </p>

<p>Is your school a CSS Profile school?</p>

<p>Does it meet 100% of demonstrated need?</p>

<p>Only your parents know if they can afford the Plus loans. If you’re going to be responsible for some of the Plus debt, then you will have too much debt.</p>

<p>What kind of career will you have when you graduate?</p>

<p>see after i was admittted on waitlist… we deposited just in case… but it took us until about June that I was going to Bryn MAwr. My parents said they can afford it…
but see at the time I REALLY wanted to go… dream school and all…reality finally kicked during the middle of first semester. </p>

<p>After I graduate as a chemist … if i get a job … starting salary will probably be a little aboive 30K.
If i puruse the cal-tech track and become a chemical engineer… i guess salary would be higher… </p>

<p>but I am still considering math and physics as potential majors. </p>

<p>idk the debt does seem ALOT… man o man I wish i realized this a lot sooner =(. I feel slightly stupid.</p>

<p>A friend of the family is applying to Bryn Mawr this year. Was your parent’s Plus loan part of your package or are they taking that out to pay their EFC? How much grant money did you get?</p>

<p>I got a little over $29,000 grant money
and the plus was part of my package!</p>

<p>btw BRYN MAWR is a great school and all… but I don’t think I can afford it financially for 4 years… </p>

<p>atleast I went there for a year and got a nice experience. </p>

<p>I have a another question. I did well my first semester and if I work just as hard and apply to Rutgers as a transfer… will I get any scholarships? I may have to take summer courses if I go to Rutgers hmph.</p>

<p>Okay, so $29Kgrant+14Kparent loan+5500student loan+ campus job(?) = around 50K in need, thus you are from a very low income family, no? How will your parents ever pay this off? Do you get any Pell grants?</p>