<p>^ Isn’t your daughter @ Stanford?
Under the new program, parents with incomes of less than $100,000 will no longer pay tuition. Parents with incomes of less than $60,000 will not be expected to pay tuition or contribute to the costs of room, board and other expenses. Students will still be expected to contribute their earnings from work during the summer and academic year.</p>
<p>Dad ll, if you are paying tuition at * all* at Stanford, you aren’t low income.
;)</p>
<p>And Stanford had a NO LOAN policy for it’s needy students. If DadII daughter is being offered a loan, she is not considered LOW INCOME at Stanford.</p>
<p>O.k. clarify time. The FA with Perkins loans I am referring to are from other schools such as Duke, Vandy, WashU etc back when. Many thanks to Stanford, we don’t have any loan so far.</p>
<p>Well…Dad II…unless you are talking about THIS admissions and financial aid cycle…all bets are off on that Perkins loan. Times have changed a LOT. Many more students with significant need are applying everywhere. What happened when your DD applied two years ago is very likely NOT going to happen this year.</p>
<p>Like I said…my kid got a Perkins for two years. She did NOT get one for the last two years. Times have changed.</p>
<p>Older S has taken out Staffords (unsubsidized), but not to the max so far. He also has a job during the year, a summer job and a merit award. He paid a little over 50% of COA last year, about 40% this year. S2 will do the Staffords and jobs also (and we would dance with delight if he gets any merit $$), but expect our costs will be higher with him. When both kids are in school, we will need to hit the HELOC for part of the EFC those two years.</p>
<p>Just an added note re HELOCs: For people with cash-flow issues, HELOCs can be more attractive than other private loans because a longer term (e.g., 25 years) and an option to pay interest-only may be available. These two features combined can bring the monthly payment way down, if needed.</p>
<p>HELOC: the interest may be deductible; check with your tax advisor.</p>
<p>Direct and FFELP also have a “consolidation” and variable repayment programs.
<a href=“https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jsp[/url]”>https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jsp</a></p>
<p>Congress set the rates, not market.
<a href=“http://www.studentloanfacts.org/loanfacts/overview/Interest+Rates.htm[/url]”>http://www.studentloanfacts.org/loanfacts/overview/Interest+Rates.htm</a></p>
<p>end is near for FFELP. How close I don’t know. Note the cost savings to the budget and the expansion of $ amounts and student eligibility.<br>
<a href=“http://www.usafunds.org/news/21jul2009/wu072109a.htm[/url]”>http://www.usafunds.org/news/21jul2009/wu072109a.htm</a></p>
<p>A few good articles on DOE expansion into FFEL program because of the inability of private lenders to borrow in the market and to substantiate their continued existence. The banking crisis has essentially nationalized student lending and made DOE the Reserve Bank for Student Lending.</p>
<p>Just a few notes to add:</p>
<p>Effective July 1, 2010, all federal loans will be made through Direct Lending (including PLUS). There will be several servicers (companies that used to provide FFELP loans), but they will not compete through rate differences. You may have a particular servicer, but the loan will be a DL loan & will be made through the school itself. No more shopping around. You are assigned a servicer. You will not need to do any looking, Dad II. Your son will accept the school’s loan offer, complete entrance counseling, complete a Master Promissory Note, and voila.</p>
<p>Perkins program is changing due to DL switch, as well. I honestly can’t tell you how that will actually play out - whether it will result in more or fewer Perkins loans. </p>
<p>Subsidized loans are offered based on need. COA-Federal Methodology EFC-all need based aid (federal, institutional, private - including work study)=eligibility for sub loan (up to 3500 freshman, 4500 sophomore, 5500 jr/sr). </p>
<p>Unsub loans are not based on need. COA-ALL AID=eligibility for unsub loan. Annual max for combined sub + unsub is 5500 fr/6500 soph.7500 jr-sr. Independent students can add 4000 to annual max for fr/soph, 5000 for jr/sr.</p>
<p>These amounts do NOT vary by school.</p>
<p>I will just add a caveat here: I did not attend the FSA convention, where the switch to 100% Direct Lending was covered. I viewed the powerpoint presentation that states that ALL federal loans (Stafford, PLUS, consolidations) will be DL effective 7/1/10. I am unable to find any documents that specifically state that ALL schools MUST be on board for DL on that date. However, legislation for 2010-11 aid is based on the recent HR3221 legislation and the powerpoint from the FSA convention states that ALL loans will be DL effective 7/1/10. My school is already DL, so we just covered the changes that affect us in our training. </p>
<p>But Bill Taggert’s comments posted on the Student Lending Analytics Blog are as follows: </p>
<p>Fiscal 2010 budget includes move to 100% Direct Lending</p>
<h1>More than 2,000 schools now in Direct Loan program</h1>
<h1>Prepared to assist all schools who want to be ready for the program.</h1>
<pre><code>* Doesn’t commit you to join. You will have double barrel capacity to deliver federal student loans next year at your institution.
<p>By anticipating legislative changes you will be positioned to deliver financial aid when students need it.
Taking these steps to ensure smooth transition</p>
<pre><code>* Want to make sure you receive all the training necessary
<p>SO … as usual, confusing … move to 100% DL but don’t need to commit?? I THINK … will not swear to it … that means schools need to do DL starting next July.</p>
<p>Thanks for the update kelsmom. Personally I would as soon have the direct loans. It has been so much simpler at my daughter’s school (that has direct loans) than at my son’s and my school.</p>
<p>Both of my kids had Direct Loans…very easy…one vendor…and VERY VERY easy once repayment time came for DS…only ONE payment to make.</p>
<p>kelsmom, many thanks for the update. So the whole process is fairly simple - pick the school, sign some papers and you are done.</p>
<p>Have you looked into other options like refiancing your home since interest rates are at their lowest now? How about borrowing from parents and paying them more interest than they are currently getting on their CD’s or savings? Home equity loans are also an option to give you some leverage if you are able to pay off each year when you might get a bonus. Our s has been working since he was 11 and will be contributing each year towards the tuition. We like the idea of him having some skin in the game.</p>
<p>Yes, the financial climate is VERY different this year. People with jobs should not claim to be in need. There are many, MANY underemployed and unemployed parents out there. In many cases families that were 2 income families are now 0 income families. Parents with incomes, especially 6 figure incomes and regardless of their other expenses, should count their lucky stars, especially when they dont even need a spouse to work.</p>
<p>I am certainly thankful that we are both working … even though we make less each year because our benefits are eroding quickly & our “pension” will likely be as elusive as our social security … but we are so much more fortunate than so many. Just the same, it will not be easy. I understand where Dad II is coming from. D attends a school that meets 100% need without loans, but S will most likely cost us more. We will probably have to borrow, which we have not had to do for D’s first three years of college. Again, I KNOW we are fortunate. But I still feel the pain & worry about how we’ll make it work. I’m not complaining. It’s just scary.</p>
<p>Dad II, good for you for thinking about this in advance.</p>
<p>Yes, it is all relative. You are right, kelsom.</p>