First timer here. Need to take out loans for my son. How do I even start?
How much do you need beyond the the federal direct loans?
They cost is close to 80,000. We have some to cover but wanted to take loans for rest. We have t received our aid package yet
I will first say…free advice…I would not recommend mostly funding an undergrad education with loans. If you need $50,000 a year, you will have $200,000 plus interest in debt at graduation which is way too much in my opinion.
Remember, you will need to be a qualified cosigner or loan recipient for all four years.
You have a number of options.
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Parents can apply for the Parent Plus Loan up to the cost of attendance.
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You can use a HELOC using your house as collateral.
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You can take a private loan. I would suggest you go and discuss private college loans with a loan officer at your bank to get the provisions for this type of loan.
Are you you expecting to receive significant need based aid from this college? If you haven’t seen your aid award yet, give the financial aid office a call.
Is this for Syracuse for a degree in sports management? Conventional wisdom is that the total in college loans should not exceed the first year salary. Your sports management grad is not going to get a $200,000 a year job.
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Thanks for your reply. My son did reach out to the financial aid office via email but hasn’t heard anything. We will reach out again.
We do have enough to fund the majority of the first year. But my thinking as a newbie is if we take out a loan we can keep our money in it will gain interest. When he graduates we can then use it to pay the loan back. Does that make sense
No, the interest on the loan will be most likely higher, and it starts immediately. ETA we started paying the interest immediately for a lower interest rate and to lower the amount for our kids. They took out about $60,000 each for in state public school (about half its cost), I think by the time my oldest was graduating I was paying $1000 a month in interest! Fortunately they got decent jobs and will pay it off aggressively in 5 years (accounting and finance). They pay $1000 a month plus any extra bonus money.
It’s not good finance to take out a loan that will earn interest from the date of disbursement…with the hope that you will be able to pay it off with interest earned.
Plus…won’t you be using that loan money to pay your kid’s college costs?
If you only have the almost $80,000 for the first year and zero for the second, third and fourth years, in my opinion, this college is not affordable. You would be taking $240,000 or so in loans, plus interest. That is an insane amount of money for any undergrad degree.
I realize syracuse is your kid’s top choice, but as a family, you need to look at the finances of this a lot more carefully.
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Thanks again. I didn’t realize interest started at disbursement of funds. Is this for all loans?
“No, the interest on the loan will be most likely higher, and it starts immediately”. This.
Sit tight until you see the aid. If you need to borrow for sophomore, junior and senior years, there is a high probability that your kid will not graduate from Syracuse.
Do you know how many kids left their colleges in June 2009 never to return? Parent A lost their job- hey, we can tighten our belts, plus we have unemployment. Then parent B loses the job- kid heads home, gets back the old HS job and pieces together classes here and there from a local university.
Sit tight. If the aid doesn’t materialize, you guys don’t have time for wishful thinking around borrowing the balance. You’ll need spring into action to get excited about another, more realistic option…
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Pick up the telephone and call. By now you should have received a package if you will be getting one. Were your financial aid application forms all completed on time? Had your kid checked his portal and spam folder? Were you selected for verification and did you complete that process? Does this school use IDOC? Did you send all requested documents via IDOC?
Are you expecting need based aid? Syracuse doesn’t meet full need for all. Just FYI.
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Yes…interest will start accruing for all the types of loans I listed as of the date of disbursement.
And for some, loan repayment will also immediately start. If you take a HELOC, you will be paying monthly starting the first month after disbursement. Many private bank loans have this as well.
Parent Plus, I believe, is paid after graduation or when the student leaves college otherwise. And that is a parent loan…your responsibility. Interest accrues as of the date of disbursement. And it’s not low interest.
Well we won’t be going this route. I assume it’s different with the loans in financial aid packages?
The Direct Loan to your student, if not subsidized, will also start accruing interest as of the date of disbursement. The limit for freshmen is $5500…which is a drop in the bucket on $75,000 or so. Only $3500 can be subsidized (meaning interest doesnt accrue).
I’m not clear whether you have financial need or not…but if you don’t according to SU, the loans will be unsubsidized ones.
Some financial aid awards list out the option for the Parent Plus Loan…but buyer beware…this is a parent loan…not a student loan.
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This college is unaffordable.
We took out some loans for our children, but they were nowhere near $80K!!!
Some Parent Plus loans have certain rules and when you sign, you acknowledge that the loan can be resold to another lender.
That’s what happened with my daughter’s loan about 3 times! I believe it was just under $8K, and we paid while she was going to school. Those folks were happy to charge us as soon as it was disbursed! We didn’t have a problem paying for it because it was very manageable.
(She wanted to take a year off, after graduating from her UC, to do her clinical volunteering, and studying for her PCAT medical applications. We took the loan out before she graduated and set it aside for her.)
Anyway, my nephew graduated in June 2020 from our local instate university with a degree in business, but asked his advisor to place him as an intern in a Sports management company. He wasn’t sure he would like it. He was hired by the company, when he graduated, and they are paying for his MBA in sports management at the school that is ranked 4th in the world for SM.
He doesn’t make a strong salary. He still lives at home (limitations from Covid aren’t the reason he’s still at home). He’s trying to save his money because he realizes that his earnings aren’t enough to begin doing the “big” spending.
Why would you want to spend that insane amount of money?
My nephew is very popular, athletic and sports savvy. Clients trust him because he has been an athlete all of his life and can talk the talk and walk the walk. That’s why he was hired. During his time off, he coaches a high school JV team.
You son will get a job based on his skills and knowledge, not because Syracuse is on his resume.
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Every single student regardless of family finances is offered $5500 the first year, $27,000 by senior year.
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If you have $80k for one child then it sounds like your budget is $20k/year + the $5500 federal student loan, so $25k total. Do you have any options that are in that ballpark? Does any of the $80k have to cover other children?
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@sjmast You can call the Financial Aid office as a parent. Unlike Admissions officers, Financial Aid officers are almost always fine with talking to the people who actually pay the bills.
And maybe double-check that you filled out the FAFSA and CSS Profile correctly? A common mistake that I have heard that people make is that they lump 401k and IRA funds with your other assets, but they should be reported separately. This is because your “regular” assets are assessed as part of your ability to pay for college, but the assets that are already in your 401k or IRA or other retirement plan are not (although the yearly contributions are added back to income, which is an unpleasant surprise for many).
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To clarify…the student Direct Loan amounts are
Freshman $5500
Sophomore $6500
Junior $7500
Senior $7500
For a grand total of $27,000.
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But isn’t the subsididized loan the favorable way?