<p>Hi, I have a question. My parents make about $150,000 a year, but they only have about $10,000 in savings, so they're going to have to take out loans for college. Can I go ahead and tell a need-aware school that "I can pay for it" if my parents can pay off the loans in three or four years? I don't really understand how student loans work so it'd be great if someone could tell me the answer... thanks!</p>
<p>How much will your parents be expected to borrow for 4 years so you can go to the college you are talking about?</p>
<p>If your parents make 150k and have only 10k in savings they either live in a ridiculously expensive area and aren’t able to save, are in debt up to their eyeballs and haven’t been able to save, or have only recently begun to make that kind of money so there was no time to save. </p>
<p>If they are in debt up to their eyeballs, why would you think they can take on any more debt just to educate you? When, exactly, would they get their debts paid off and be able to retire?</p>
<p>If they have only recently begun to make 150k, what are their real true living expenses like? How easily will they be able to pay off any loans they take out for your education?</p>
<p>If they live in an expensive area, what makes you think that they can pay their expenses and a loan for you at the same time?</p>
<p>You need to visit [FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org) and run the debt re-payment calculators. You also need to sit down with your parents and their financial records and run the FAFSA and CSS Profile calculators at [College</a> Calculators - savings calculators - college costs, loans](<a href=“College Board - SAT, AP, College Search and Admission Tools”>How Much Will College Cost – BigFuture | College Board) so that all of you know just exactly how much the colleges will expect your family to be able to pay.</p>
<p>Then you need to start looking for a financial safety school that you can pay for without a ridiculous loan burden just in case you decide not to put yourself and your parents in hock for the next umpteen years. Be good to your parents and help them turn that 10k of savings into 3-6 months of living expenses in an emergency fund before you ask them to take out loans for your education.</p>
<p>That’s a discussion to have with your parents.</p>
<p>A need-aware school won’t care, by the way, because the issue is not whether you’ve applied for aid, but how much aid you will need. The fact that your parents haven’t saved for college does not necessarily translate to “need.” Without more information (# of kids in family, for example), just based on your post, it is unlikely that you would qualify for significant need-based aid anyway.</p>
<p>Thanks. My parents have only been employed for three years so they haven’t been able to save too much, with house and car mortgages going on too. They can save about $3,000 a month for college.</p>
<p>Most colleges/universities will allow you to set up an installment plan. There may be a small fee attached to this, but it is easier than taking out a loan. If they really can pay 3k each month that is 36k over the course of a year which is plenty for in-state expenses at your local public U, and will cover most of the expenses at a lot of smaller private colleges and universities. When you communicate with the colleges/universities that you are interested in, ask about their installment plans. </p>
<p>Good luck!</p>