Loans for College

The other thing I would add – if you go on the private loan market – for a chance at better terms you have to apply and have your credit checked before they tell you the interest rate you qualify for. There is no way to “comparison shop” up front.

FYI, if you have a cluster of credit pulls obviously related to one loan in the end, it only affects your credit score one time.

No.

I’m good. I don’t need anymore opinions. I’ll seek advice through a financial advisor.

Just another thread where some VERY experienced and knowledgeable CC posters (some who actually work in college financial aid offices) try to give advice and make suggestions that the OP doesn’t want to hear, so the OP just says “bye”.

The sad thing is they’ll figure it out at some point; hopefully it’s enough time for the student to find another (affordable) college.

It’s OK for OP to say they have enough opinions! Plus they even shared their plan of action! Even though various posters may have lots of experience and appear to be “experts,” they are still random anonymous individuals in OP’s life and were not really addressing OP’s concerns. No need to disrespect OP.

This isn’t possible. A PLUS loan is the parent’s loan and doesn’t get signed over to the student. It cannot be combined with the student’s loan for repayment. Of course the student can pay the loan payments, but they will remain in the parent’s name.

Well…i guess the student could take a private loan themselves once they have a great job…and pay off the parent plus loan…but still have their own payment.

Quick question regarding the college tax credits…if the student cannot be claimed as a dependent for tax purposes, then the student would be able to claim the AOTC correct? Even if the student didn’t owe taxes they would be able to get up to $1,000 as a refund (40% of the $2,500 credit). This sounds like a good option for parents whose income is above the AGI limits for the AOTC, especially since the latest tax reforms have removed the personal exemptions.

Please note however that the key word here is cannot. Simply not claiming a dependent that qualifies would not enable them to take the credit. From what I’ve been reading, it sounds like a student would not be a dependent for tax purposes if they provide more than 50% of the cost of their support. From what I can tell, this support doesn’t need to be earned income. The Direct Student Loan would count as the student-provided support since the loan is in their name. I think 529 funds would also count as student-provided support IF the 529 is in their name. Scholarships and gift funds unfortunately do not count as student-provided support. Does this sound right?

If the student is independent for tax purposes, he can take the AOTC but only up to the amount of taxes owed. They are not entitled to the $1000 in refundable credit. It’s the way the law is written that the parent claiming a dependent gets more than if the student takes the credit.

Because of my completing some of the questions incorrectly on Turbotax (which I fixed), it kept trying to give my daughter the AOTC but it would only give her $500 because that was the amount of tax she owed. Next year mine will be independent, but I’ve used all 4 years of AOTC so she’ll only get the LLC, which I think is also limited when the student takes it.

have a grandparent be the co-signor.

Why would you suggest a retired person take on that kind of debt, @VAMom23?

@austinmshauri Read it again. I did not suggest that grandparents take on the student’s debt. if the parents don’t want to co-sign because of an upcoming home purchase, having a grandparent co-sign instead keeps the debt off the parent’s credit report. Then pay off the loan. Its an option.Get life insurance though regardless of who co-signs.

It’s not exactly a bargain to purchase life insurance for someone over 65.

If a grandparent.cosigns the loan, ultimately they’re responsible for repaying it. The parents intent won’t matter to the bank. If anything goes wrong, it’s the grandparent who will have to pay.

Some things we are going to do:
Son works now and in summer.
I will look for a part time job.
Son applied for local scholarships.
We claim AOTC education credit on our taxes.
We will get an extra $500 dependent credit for our son I believe on the 2018 taxes.

If your son pays more than 50% of his own support, then you cannot claim him as a dependent for taxes.

But you might lose some tax credits.

The student loans in his name would count towards his support, the scholarship would not.

https://www.uwplatt.edu/admission/cost-chart

Looks like tri state tuition and fees is about $12,000 and traditional room and 19 meals plan $7,000 for a total of $19,000.
Say $20,000 with books.

Minus $6,500 loan, scholarship is $13,500

He can earn $2,000 this summer, so $11,500.

@mommdc

What scholarship? If this kid receives a $13,500 scholarship he will be fine, I agree…but I don’t see anything on this thread that says he got a $13,500 scholarship.

Books are included in the tuition fees or Platteville. There are no extra fees for that. He does not have a scholarship for $13,500. I have it all figured out. I thought this would be helpful but it really wasn’t.

This implies that you currently own a home. If that is correct, you could try to get a HELOC to help pay for college costs. The only problem is…when you sell your current home, you will need to pay it back in full…meaning that you won’t have that portion of the equity to put towards your next home purchase.