Hello I had a question about the parent plus loan, so if the university gave 25,000 in plus loan but the parents credit score isn’t that great can a endorser who agrees to cosign be the one who has to repay the the money owed? And nothing would affect the parent just the endorser? Also can they start after the son graduates from college?
If someone cosigns a loan for you, the idea is that you’re the one who will be making the payments. The cosigner, not your parents, will be the one who has to pay if you don’t. Can this person afford to gift you $100,000 + interest to attend an OOS school if you can’t repay the loan? If that happens, how will it affect their relationship with your parents?
Did you get accepted to any schools your parents can afford? UConn is a nice school, but it’s not worth ~$120k of debt.
In general, cosign loans are the responsibility of ALL signers. You are both 100% responsible (whoever the signers are). Regardless of any circumstances (death, loss of job, bankruptcy, etc.) you are expected to pay. If you can’t, they go to the cosigner. If they can’t, loan defaults and both of you get major credit dings.
Be careful. Not an optimal way to fund college. I would look for less expensive schools if this is the only way to get it done.
@austinmshauri yes I understand that, but I plan to pay after college by sending money to them. The only reason why I want to attend uconn because their business program helps students to their future career path. And I just want to take the chance to make my parents proud. Because we are not rich. Also, it’s step toward if having a better future is it not?
@rickle1 I hear you, but college will always be rising tuition, so isn’t the cost of education worth it in terms of the long run in the future? And liability hats private loans if the person can’t pay it moves to other person. Parent plus is only the cosign er?
Is taking on ~$140k of debt for a business degree a path to a better financial future for a low income student? No, I don’t think so.
Is this other person a relative? If they have to borrow $100,000 for you, it doesn’t sound like they have the money either. Are they comfortable knowing they’re on the hook for ~$140k if you don’t pay? Can they afford to gift you with ~$140k? Is this on top of the ~$27k federal student loan? If so, your total debt for an undergrad degree will be something like $172,000 ($127k for the loans + ~$45k interest). What type of job are you interested in? Some types of businesses run credit checks and they don’t hire people with that kind of debt.
What are you going to do if your cosigner qualifies to borrow for 2-3 years but are denied for the 3rd or 4th? You’ll owe ~$50-75k (+ interest) and won’t have a degree. You’d have to transfer, which may add a year to your studies if the new school doesn’t take all your credits.
What’s wrong with the affordable schools that accepted you?
“…the university gave 25,000 in plus loan.” That’s a bum deal. It’s no gift. It’s burden.
“The only reason why I want to attend uconn because their business program helps students to their future career path.” Lots and lots of colleges do this, you do not need 100k in loans for this college. Period.
Here’s the big problem: if you want a business career, you need to be business savvy. Taking 100k loans **makes no financial sense. ** You can’t justify this. Its the wrong thinking for someone headed into business. Get an affordable undergrad education. Later, the best MBA you can.
Be savvy.
Don’t parent plus loans require payments as soon as the money is dispersed?
100k in loans will cost you about $1000/month, for ten long years. Let’s say you get a 36k job. That’s about 2400/mo take home. Minus 1,000 loan payment leaves you 1400 to cover living. Yikes. Rent, utilities, food, transportation. Not much left over. Ten years.
I don’t know the particulars on Parents Plus, but in general, cosigning a loan is not a good idea for anyone (accept the lender as they have more opportunity to collect). So many things can happen along the way. Is the cosigner really prepared to pay the loan back (if you can’t- this happens all the time)? What will that do to their other plans? You missing payments affects their credit.
If they can pay the loan, are they in a position to just lend you the money? Personal loans are better options as long as they are treated respectfully.
The best option is to not borrow beyond the Federal subsidized 27k. You can find many schools that have a quality business program. Going in to significant debt is not wise and will create burdens for you for many yrs to come.
@lookingforward yah I know, but if go a community college or a low end school the salary rate at the end won’t be high for future jobs, and the internships jobs available are significantly less at those schools also. And the average base salary for finance job is around 45-60k.
@austinmshauri it’s my moms fiancee. Well i always wanted to do global business trade or finance. I’m not leaving to them to pay the bill I’m definitely going to send money after college. And uconn was actually the cheapest school out of all the ones I applied. I should have applied more financial secure colleges, but I felt like I wouldn’t fit into those schools ( I am not making any claims that community school or low end schools are not great, I’m just saying I don’t think I’d fit in). I wanted to go to my State flagship school, but I got waitlisted twice… if it at most I think uconn is too expensive I was thinking of transferring out of the first year, and try to apply back to my state school. I just want to have a future and get out of the “low social class status”, its sad that’s too expensive, but I’m trying to tell myself that the future outcome will be better. Sorry if I sound ignorant, but it’s just my personality, and the background I’m facing.
Why not go to your local CC for two years and then transfer into your state school? Many CCs have arrangements with state schools to admit CC grads. After graduate from your state school no one will care that your did your first two years of college at a CC they’ll only look at where you graduated from.
Community college in CT or MA (where do you live?) And then use the guaranteed transfer program. Both states have one. Look it up.
You can run the numbers same as austinmshauri and I. When I first ran it for 48k, your in pocket income after taxes and loan repay is roughly what a fast food manager takes home.
And what if your cosigner is desperate or angered and needs the money or calls in your loan earlier? Or you have a job issue and miss a payment or two? Get out pencil and paper and figure this out. Rent and the etcetera. Be savvy. It’s a life skill.
That’s a lot to ask of your mom’s fiance.
There’s nothing wrong with starting at a community college and transferring later. I have a relative who graduated from a cc and now works at Bloomberg’s in Manhattan. Their 6-figure salary is the same as the grads of some well known 4-year schools.
If none of the schools you applied to are affordable, you can take a gap year and apply to a new list or start at a cc and transfer. I wouldn’t take on that kind of debt. What’s your plan if your mom and her boyfriend break up? How will you and your mom feel if they have financial issues? Parents disagree about finances. I wouldn’t put that kind of pressure on your mom’s relationship.
@lookingforward it’s MA. I looked it up before I want to major in business finance, but there was none for isenberg school.
Isenberg has an undergraduate finance major – https://www.isenberg.umass.edu/programs/undergraduate/on-campus/majors/finance
I agree @lookingforward – if you want to major in business finance, then you should start by learning to make smart financial decisions. Taking the PLUS loan for UConn when your mom can’t afford to make payments and needs to rely on her fiance to help out is not going to lead anywhere good.
OP, are you sure, I only looked at a few but, eg, Bunker Hill Business COncentration seems to work for Isenberg. Ido not know all about this program. It does suggest one can speak with an advisor. It seem to say not all credits may transfer for the major, specifically, but 60 will be counted, somehow.
If you did all the checking possible, down to speaking with them, ok. If not, give it a try.
Most of us in New england like UConn, for various reasons, various programs. But in your case it’s defeatingly expensive.
Our local CC does have a specific business major, with lots of good internships for the students. Some of them end up finishing their four-year degrees part time because the internship led directly to a decent job on a promotion track.
Go visit your CCs and find out what they have to offer. Do not take on this kind of debt.
Have you contacted UCONN financial aid office to see if there are additional scholarships you can apply for? Did you get any out of state merit aid?