<p>Mom2collegekids. Thanks for your inputs. Our income level qualified her for all cash FA from her school. So, we had no knowledge of loans.</p>
<p>IN DS’s case, I have been using the terms such would and could. because we don’t know which school he will be attending next fall. The likelyhood of “hitting the jackpot twice”, as a frequent CC poster puts it, is low. So I want to be prepared.</p>
<p>Dad II,</p>
<p>If you are a homeowner, don’t forget to look into HELOC (Home equity lines of credit) to finance college costs. Interest rates are very low right now - lower than student loans - and the interest expense is deductible.</p>
<p>Bay, interesting point.</p>
<p>Let me ask you this. Say the COA for school A is $55K/year and they gives us a FA package of $30K grant, $2500 work study, $3500 subsidized Stafford and $1750 Perkins. </p>
<p>Let’s say we use HELOC instead of taking out those two loans. Will the school takes it the wrong way as we don’t need the loans and reduce the grant for next year? Since they don’t know you take out the HELOC. </p>
<p>Also, if we use HELOC, we will have to start paying it rightaway from the cash we don’t have. Taking out those other loans could allow us to have food now and let DS worry about paying them when he gets a good job. </p>
<p>So, I would go for those subsidized loans first.</p>
<p>DadII, that’s the approach we took with our son and had him take the loans and work study. We viewed it as his investment in his education. Gives us some breathing room on the PLUS loans we had to take for the rest of his education costs not covered by the school.</p>
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<p>Remember…you may not get subsidized…your kid might get UN subsidized loans. School’s choice.</p>
<p>I think a $30,000 grant is VERY optimistic.</p>
<p>Are you suggesting your son might qualify for a Perkins loan? Those are typically awarded to LOW income students.</p>
<p>T1, I am sure DS will get subsizied loans and I bet DS could get around $40K grant for the two years when we have 2 kids in schools at the same time.</p>
<p>D2…the college(s) will determine whether sub or unsub. We had two kids in college for THREE years. DS never got a full subsidized loan…not ever. His sister did. Varies by school.</p>
<p>T1, may be your family income is way higher than ours. Also, I am SURE DS will get into at least one T20 school who offers excellent need based FA.</p>
<p>My estimation is based what DD got from 4 T20 schools. They all offered DD subsidized Stafford and Perkins. Our income has not changed that much from two years ago and DS is applying to similiar schools.</p>
<p>Don’t bank on getting Perkins. Perkins is a campus based loan with very limited funding. Many schools do not do Perkins at all. Those that do award it to the lowest income students with the most need.</p>
<p>If you are eligible for subsidized Staffords then I would say they are a better deal than a HELOC. First the govt pays the interest until the student graduates or drops below half time plus a 6 month grace period. So they are interest free until then. A HELOC will not be interest free for the first 4-5 years and you will have to start repayment immediately. Second, as previously mentioned, interest rates on subsidized Staffords will be 4.5% for loans disbursed 2010-2011 and 3.4% for loans disbursed 2011-2012 school year. Don’t know what a HELOC would be - even if lower it will not be 0% for the first few years. Third - student loans are also tax deductible.</p>
<p>If you do get Perkins then that is 5% and the govt pays the interest until after graduation or dropping below 1/2 time plus a 9 month grace period.</p>
<p>Now an unsub Stafford you *may *be better off with a HELOC.</p>
<p>We went with unsubsidized Staffords instead of HELOC. Our daughter doesn’t have to pay principal until she graduates, and there is a grace period. If she goes to grad school, joins Americorps or PeaceCorps, there is a hold put on loan payments. Given what’s happening in the real estate market, we didn’t want to borrow against the equity in our house if we decided to downsize and sell after she graduates. Also, we figure this is a good way to build her credit.</p>
<p>FWIW, I just returned from a visit to my bank (BofA), and there happened to be a poster advertising a $100,000 HELOC at 5.12%, with monthly payments of $420.00.</p>
<p>So that is a higher interest rate than subsidized Staffords awarded for 2010-2011 and 2011-2012 will be. But lower than the current 6.8% for unsubsidized.</p>
<p>swimcatsmom, you know this for sure?<br>
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<p>Since both our kids get Perkins in some of their packages. This confirms what I have been saying all alone that we are indeed among the lowest income with the most need.</p>
<p>BTW, this makes me feel so sad.</p>
<p>I just googled Perkins loan. It’s for families with income below 30,000?</p>
<p>Schools set their own criteria for Perkins so it is very hard to predict, which is why I said to not bank on it. It is not like the Pell grant where a specific EFC (below 4617) makes you eligible at every school. Or like the Stafford where all students are eligible for at least the unsub portion. An many schools have no Perkins at all so you cannot bank on it. At my daughter’s school the Perkins seems to go to Pell eligible students (which she is). My son’s school has no Perkins funds at all. Some schools may award it to less needy students. I know one poster who was very surprised to get it as they did not qualify for much need based aid at all. Unpredictable.</p>
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.Do you qualify for the Pell grant? If so then yes you are amongst the lower income with the most need. For some reason I did not think you were that low income - I must have you mixed up with another poster.</p>
<p>Dad II - seriously, how could you be such low income if you have PhD with a professional job. It doesn’t make sense. Maybe I am missing something. WE should be applying for FA then.</p>
<p>For some reason I did not think you were that low income - I must have you mixed up with another poster.</p>
<p>I don’t think so ;)</p>
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<p>However, I do believe he lives in an area which makes him feel he is lower income by comparison.
It’s all perspective.</p>
<p>Oldfort, I think everyone should apply for FA.
You never know when things can change, some merit aid may require FAFSA, & I think it is important for students to at least take out a small Stafford to have some skin in the game.
But I also realize filling out that stuff can be a huge PITA, when you know that it is unlikely to recieve a grant.</p>
<p>Re Perkins, it is supposed to be for low income students, but as it is through the college that decides the criteria, if it happens to be a school that has a large endowment, they may decide to be very flexible in their definition of need.</p>
<p>I have heard of students elsewhere qualifying for Perkins- but it is not generally a very large loan in any case, and in a school where total costs are above $50,000, for a truly low income family, it is not going to be enough to make much of a dent.</p>
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<p>No you aren’t amongst the lowest income. As Swimcats said…each school sets their OWN criteria for awarding the Perkins loans and it’s based on the financial profle of their school. All this means is that your finaid form indicated that you qualified for the Perkins from the schools that awarded it. You do NOT necessarily qualify for it at EVERY school.</p>
<p>And D2…you have repeatedly said that your family annual income is in the $100K range. Times have changed since your DD applied to college. The income level cut off for the Perkins is lower at most schools. </p>
<p>Just FYI…our DD got a Perkins her freshman and sophomore years at college…oddly. We do NOT consider ourselves to be low income, and I would guess that most folks would agree with that assessment of our finances. BUT I guess for the matriculated students at her school THOSE YEARS…we met their criteria and they HAD the money to award her. She did NOT get offered a Perkins at all her junior or senior years.</p>
<p>So…don’t BANK on getting offered a Perkins. And also don’t bank on getting offered Stafford loans that are all subsidized. When DD was a freshman and DS was a senior, DD got subsidized loans and DS did not. Both schools had similar costs of attendance. EFC (per FAFSA) was virtually identical. Different schools.</p>
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<p>D2, are you saying that your kids have already received Perkins awards for the 2010-2011 school year? How odd…your DD is a returning student. Typically finaid awards for these kids are NOT out yet. I’m not sure that Perkins loans for anyone have been dispersed for 2010-2011 school year as they will be based on the FAFSA which can’t be filed until Jan 1, 2010.</p>
<p>Also, I thought Stanford had a NO LOAN policy for “low income” Why would they be offering your DD a loan in her package?</p>
<p>oldfort, I just went and looked over some of old these FA letters. Yes, we were offered Federal Perkins loan at $1725 per year. I double check all the printouts of all the profiles we have submitted and found all the numbers are corrected (like no missing a zero or something).</p>
<p>So, that leads me to this hypothesis - among all the admitted students in those expensive schools our kids are with the most need. Evenso in the general society we may not be.</p>