It would be okay to take out the federal limit for RPI, for instance. 27k is a reasonable level of debt. But that amount of debt PER YEAR? That is unsustainable, and that’s why I’m blunt. Because you’re staring down a life-ruining level of debt at 17 or 18 and seriously considering it.
Seriously, I’m in the same exact field as you. I go to a not-top school – and it has NEVER affected my internship options. I’ve beat out kids from the best schools in the world for some of my internship spots, and you can too, if you’re motivated and try hard (which you’d have to do at a top school anyway, sooooo…)
Engineering is very much a skill-dependent field, not a prestige-dependent one, DOUBLY so in computer-related engineering fields.
I see this again and again and I understand where the posters are coming from but… you are projecting your values and opinions regarding loans onto the OP’s. There is a difference between advice and explanation and telling someone they cannot attend a school that they have gotten into. This OP and many others have asked questions about loan options and 99% of the responses are “don’t use loans”, go somewhere else instead of answering the questions. As long as the poster understands that they will have a significant payment for the loans they are considering, it is their choice. Is it possible for the posters against loans to just have a disclaimer “That loans are not recommended and this is why” and then stop posting?
To answer the OP’s question, I don’t know if there is an order for the loans. Definitely take the Stafford first. Then you need to discuss the differences (with your parents) between the Parent Plus including amortization options, rate etc. (which would be under their name) and the private loans like Sallie Mae or Discover etc. (which they would co-sign under your name) their rates are different, their term is different etc.
Clearly understand what a 10 year term payment would be for the total amount borrowed for both types. Once you have this information, you can make an educated decision.
@MSMead Thanks for understanding and giving a concise answer. I do realize that the loans will cost me about $1000/month for 10 years and I’m willing to take the larger part of it and my son will take a small share of the burden. At the same time I do realize that some of the overzealous students answering questions on this board want to help but I sometimes feel they assume things and presume that we are all held by the same constraints. In my case for example, I have no intention of ever retiring, I love my job and will try to work atleast 8 hours past deathpoint haha. For that reason I’m glad to pay the full amount, albeit I will impose some of the cost to my son just because it is right for him to feel some of the burden.
I agree with you though that when an OP asks a question, helpful people should really only stick to answering the question, sticking to the point, and not assume things, but alas I appreciate the concern from these very bright kids.
MOST of the respondents on this thread are adults…not kids.
In reading your previous threads…what happened to Rowan? Did your kid apply and get accepted? What is the net cost for you there?
I will add…it really sounded like you were the kid posting…not the parent. When a HS student says they have “done the research” etc…sometimes folks like me do feel,compelled to let the student know that their research is a bit flawed.
I still think over $100,000 in loans is too much for undergrad school. But that is your family choice.
I am confused - is the OP the student or the parent? In the beginning, it sounded as if it were the student but post #23 makes it appear that it may be the parent. While I would advise a student against taking the kinds of loans indicated, if it is the parent and the parent knows that they can handle the payments, that is very different than a beginning student trying to shoulder that kind of debt while starting out (which would concern me as much as it did Courtney.)
While we are not going the loan route and therefore can not speak from experience. I think (if this is the parent requesting information) that Parent Plus loans are set up for this kind of situation
Right. If the parent thinks these loans are the way to go…then, in my opinion, the parent should take the loans and deal with the repayment.
I personally do not think it’s right to saddle a kid with $100,000 plus in cosogned loans. Sorry…but most HS seniors don’t have any understanding of what that means.
@reformedman At my prior engineering school 100K was not an unusual amount of debt. As long as you graduate in 4 years and are in a high earning field (i.e. CS, Chem, etc.) it is manageable. If you want to be a civil engineer or pre-med that is a very different story. Don’t let people discourage you since you sound like you know what you are getting yourself into.
The PLUS is a great loan. Depending on the credit worthiness of your consiger you might be able to get better rates in the private market with Discover or Wells. What state are you from? Is there a state agency that offers loans? The biggest factor in your decision should be you want a Parent loan (i.e. PLUS or Wells Parent loan) or if you want a cosigned loan (i.e. Discover or Sallie Mae). Also consider the term, and whether you want to start making payments immediately or interest only payments or full deferment. I would strongly discourage full deferment because your interest on that amount of debt will add up very quickly.
The financial aid office at RPI should be more than willing to provide further guidance.
He was accepted to Rowan but it was only 11k award and it’s not a school he liked very much. I do agree it may have sounded like I was the student since I used the term “we” a lot, but truthfully, the question was not whether we could afford the school, it was ‘in what order should I take loans’. @thumper1 nope, not saddling anyone with the burden. @bschooltotech thanks for the suggestion, we’re from NJ by the way.
@reformedman NJ has a great program called NJClass. It is probably among the best state programs on the east coast. I would strongly encourage you to check it out.
1)Direct student loans ($5500) first
2)Plus loans are PARENT loans, not cosigned student loans. They have more protections from the government, but also have a 5% origination fee.
3)Private student loans (Wells Fargo, Discover) are usually to the student but with a parent co-signer. Rates are what you can get.
4)NJ also has a loan program available, even if student is going OOS. I don’t know about the terms.
Some schools have a private loan program. Make sure you are comparing all terms when comparing loans - origination fees, late fees, default, death of student or parent, ability to consolidate, when repayment starts.
I don’t think you should do ANY of these (except Direct loan) because you have other options. You’d really borrow $100k because the food is bad? He’ll be living at home, he can have two fantastic meals per day if you make them and tote some leftovers for lunch. Really, bad food is an excuse and he’ll be living with ramen and mac and cheese for years if he owes $100k. It’s in a bad area? Take safety measures. I went to graduate school at night in a high crime area. We walked up the ramps at the parking garage because the stairways and elevators weren’t safe. We drove each other to our cars. We traveled in a group the 4-5 blocks. Yale isn’t in the safest area, and you don’t see people turning it down. Foreign professors? Welcome to engineering! ALL schools have professors who are foreign-born, and engineering students have to deal with it. It is a problem and students ask for help and sometimes go to the administration.
How about going to NJIT for two years and then seeing what transfer options there are if he doesn’t like it? Yes, he’d forfeit the current grant, but some schools have transfer grants or by then he might be working internships or co-ops and making some good money.
@CourtneyThurston our default rate on private loans was below 3% and for many lenders it was below 2%. Given that about 40% of our students with loans had more than 100K in total debt clearly they were not having any problem repaying them. Before any one comments default rates on privates loans are way more meaningful than default rates on federal loans for reasons I will not get into here.
@bschooltotech thanks I’ll check out NJClass @twoinanddone there are other extenuating factors involved which I can’t describe here, but thanks for your thoughts.
OP, I can’t tell if you are the student or the parent. I think you are the parent.
I think it’s fine for the parents to borrow money for their children’s college if they have done the math and can afford it.
Sounds like you’ve done that.
Sounds like the student’s own debt will be limited to the federal loans, not too bad.
I’m glad @twoinanddone partially answered your question. I wish I knew enough to give you the best options.
I agree that if you’ve made up your mind to do this, than nobody needs to comment on the decision. They should just try to be helpful. It think some of the sanctimony is unwarranted, but I think they mistakenly think that you are the student who will be in over $100K in debt. That’s probably too much.
No sanctimony here. Just trying to help OP’s family avoid spending a ton of money that’s not actually going to help the kid get a better job. But if they really want to, for some reason having to do with culture or food or whatever, then ok. Your money/your life/your choice.
Is it possible for your son to do a co-op program at RPI? You’d have to borrow for the first year, but after that he’d work 6 months and earn enough to pay for the next 6 months of school, and take 5+ years to graduate.