<p>We have recieved federal plus parent loan for going into the Pratt Institute.
It is a lot of money (which shocked us) and we are so concerned about making payments.
Honestly, I have no idea how parent plus loan work. I looked in the internet for info but all i found out was that its interest rate is 8.5%
We have low income so we really want to make payment after my daughter graduates from college. But is this possible? When do they make us pay money? after graduation?
And what happens if I decide to get $10,000 and only get to use $8,000? Am I going to be wasting the rest of $2,000?
I am so confused with this parent plus loan so please help me!</p>
<p>A Parent Plus loan can be deferred until after graduation. It looks like you already have a good grasp of what it entails. Essentially, you can borrow up to the maximum cost of the college MINUS any other aid you might have gotten or any other moneys you have paid into the college.</p>
<p>You should only take the amount that you need for the cost of the college. If you accidentally get thetoo much of the loan, you can return it to the bank or pay it off.</p>
<p>Generally, parent loans begin being paid back sixty days after the second installment of the year. There is a way to defer them, but I’m not sure of the details. However, interest does accrue. [Ok, I just looked. You can defer as a matter of course, just have to apply.] You might want to post this to the Financial Aid Forum so the experts like Swimcatsmom will give you the best information.</p>
<p>There was also a thread very recently where a family decided to pass on Pratt because it was simply too expensive. There may be some good information there, too.</p>
<p>oh wow that is great. So I can make repayment after her graduation from college? she will be studying four years. how do I adjust the amount of money they offer?
thank you.
I will ask this to the finantial aid forum.</p>
<p>how come Pratt is so expensive?
so pretty much Pratt is only for rich people…</p>
<p>Many colleges like Pratt charge jacked up rates to middle-class families and disburse the extra cash to subsidize college costs for families who decided not to save for their children’s education.</p>
<p>is Pratt a good college educationwise?
do you happento know their employment rate?</p>
<p>I’m seeing some red flags here…</p>
<p>How much will the parents be borrowing each year?</p>
<p>What will you do if you can qualify the first year, but can’t qualify for the second, third, or forth years? (that often happens to low income families)</p>
<p>How much will the child be borrowing each year?</p>
<p>When you say that you’re “low income,” may I ask about how much your family earns?</p>
<p>Will your child be expected to pay back any of the Plus loans (in addition to her own student loans)?</p>
<p>What is her likely career?</p>
<p>How much do you think she’ll be earning upon graduation? (if she’s some kind of art major, don’t expect her to be earning a lot after she graduates.)</p>
<p>P.S. Pratt is NOT worth big debt…Period!!!</p>
<p>
</p>
<p>I don’t know anything about Pratt but in all aspects of our life there are things for rich people and things for everybody. </p>
<ul>
<li>Most people think Lexus, BMW, and Mercedes are cars for rich people</li>
<li>You can spend a little money on a house or a lot of money on a house or you can rent</li>
<li>You can buy your clothes at a thrift store, wal-mart, or shopping mall</li>
</ul>
<p>College education is no different. Some people pay for an expensive education at private schools, others do so at less expensive state schools, and others at community colleges.</p>
<p>
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<p>How are you planning making payments after the D graduates from college?</p>
<p>I also see red flags. The school will make it possible for the student to borrow MORE than is needed. The student could live in a deluxe dorm and have pizza delivered hourly – and OWE for all of it. </p>
<p>You can look for a “financial aid calculator” on line. I just did and here’s what it tells me:</p>
<p>Borrowing $20,000 at 6.8% means I would pay $230 a month for TEN YEARS. By the time it was over, I would have paid a total of $27,619 because of the $7,619 in interest. </p>
<p>Borrowing $80,000 at 6.8% and I would have to pay $610 a month for TWENTY YEARS. Over time I would eventually pay a total of $146,561 because of the whopping interest. </p>
<p>I used $20,000 because that’s what a college might offer to a parent for a single year and $80,000 might be what the college offers to the family for a four year degree. </p>
<p>This is a ton of money to owe. Are you SURE this is the right thing to do? Please show this to your daughter. She may want to explore other ways to get an education so her parents are not eating cat food in their old age.</p>
<p>OK, I re- read the original post. </p>
<p>The family probably got a financial aid letter from the college. It might say something like</p>
<p>Pell Grant $4,500 Yes No
Stafford loan $3,500 Yes No
Parent Plus $10,000 Yes No</p>
<p>You are supposed to circle YES for the loans/grants that you want . There should be a way to indicate that you want only $8,000 of the parent plus. (On a separate line? )</p>
<p>The PEll grant is money that does not have to be repayed. You want that! Otherwise you want to borrow as little as you have to. </p>
<p>Good luck!</p>
<p>Collegenewb:</p>
<p>Yes, Pratt is a good school for the specialized fields it teaches.</p>
<p>I received a B.Arch from Pratt in 1989. I, too, am stunned at the price of tuition today. But it’s not too much unlike similar high-ranking design schools. </p>
<p>When I started at Pratt, tuition was $6,500 a year. Now it’s what…about $37,000 combined tuition and fees? And my loan was $50 a month when I graduated.</p>
<p>My take is that Pratt needed to jack up its tuition to address the facilities issue. Many of their buildings are very old and needed renovation and restoration. The campus is much better now than it was back in the '80’s. </p>
<p>Just my opinon, of course.</p>
<p>NYCHADesign: It was really interesting how Pratt looked like before. Yes I have heard some complaints about Pratt’s facilicy on the web. Hearing that, i really would like to go back to 80’s haha</p>
<p>everyone: We are borrowing $25,000 for the first academic year of Pratt. My daoughter is already looking for a roommate and she is very excited right now…which makes me sad. On tonight’s dinner, she told me how she envies rich kids. Her best friend just decided to go to RISD without scholarship offered. sigh* I would feel bad if I told her not to go to Pratt.
We recieved subsidized, unsubsidized stafford loan, perkin’s loan, and the parent plus. Parent plus was the biggest loan which was $18,000.
We are not going to be able to make repayments now. We are going to make repayment after she graduates from college. Hopefully, my D’s income help the repayment.
Her major is industrial design. And she is very talented.
She says she wants to live in Stabile double dormroom…which is $1000 more expensive than the triple dormroom…sigh*
I am deeply worried but i hope Pratt’s education is worth the investment for my D’s future.</p>
<p>Collegenewb,</p>
<p>Many people envy rich people. But what they really envy are people that spend lots of money. Rich people that don’t spend their money usually aren’t envied.</p>
<p>You appear to be financing a college education that you cannot afford. $100,000 debt for a low income family is a surefire way of getting in too deep and having to file for bankruptcy in the future. I don’t know college debt assumed by parents can be discharged in bankruptcy, so it might be very difficult for your family.</p>
<p>“I would feel bad” is not a good reason to take on $100,000 debt that a family cannot afford. </p>
<p>In my opinion, there are many colleges that are much less expensive that will provide an excellent education for a student. I would not count on a Pratt education providing more income than an education from another university. I would also not count on an industrial design degree to repay $100,000 in student loans.</p>
<p>Please step away from those loans!
“I would feel bad” is NOT a good reason to mortgage your family future to a huge debt.
Some families can afford $100,000 loans, but they are the ones that are “rich” to begin with.<br>
Please do not to this to your family!!!</p>
<p>Realize that the Parent Plus Loan interest accrues and compounds. So…if you wait until your daughter is out of college, you will be paying a much bigger amount than if you make the interest payments while she is in college.</p>
<p>Please talk with the financial aid people at Pratt . They should be able to help you understand what the real cost is of taking out these loans, what you’ll need to pay back, and when.</p>
<p>There are others on this site who can better explain what the payback amounts are likely to be. Try the financial aid forum.</p>
<p>Realize that the Parent Plus Loan interest accrues and compounds. So…if you wait until your daughter is out of college, you will be paying a much bigger amount than if you make the interest payments while she is in college.</p>
<p>Exactly…and…college costs go up every year, so an $18k loan the first year, will likely be a $20k, then a $23k loan, and then finally a $25k loan. With cost increases and accruing interest, you could owe $85-90k at graduation…</p>
<p>Loan Calculator</p>
<pre><code>Loan Balance: $90,000.00
Adjusted Loan Balance: $90,000.00
Loan Interest Rate: 9.80%
Loan Fees: 0.00%
Loan Term: 10 years
Minimum Payment: $50.00
Monthly Loan Payment: $1,179.41 For TEN LONG YEARS!!!
Number of Payments: 120
Cumulative Payments: $141,529.50
Total Interest Paid: $51,529.50
</code></pre>
<p>You say that you’re low income. Can you afford to pay $1200 month for 10 years? Or, put another way, can you afford to pay 4 car payments in addition to all of your current expenses?</p>
<p>I’m sorry, but this isn’t affordable by any stretch of the imagination.</p>
<p>Do not do this, please. That a school will let you do this is one thing, but to actually sign up for this kind of debt? No. Your daughter is already showing you she has no grasp of money;</p>
<p>
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<p>She wants you to take on 100K in debt but she can’t live in a triple? That’s disrespectful.</p>
<p>There are better ways and that probably means a different, much more affordable college. I’m sure you’re daughter will feel badly but not nearly as badly as your going to feel trying to pay off this loan.</p>
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<p>Pratt thinks this is a great idea for this family. I would not talk to the financial aid people there. Art colleges have a well-deserved reputation for encouraging their students and their families to take on far too much debt.</p>