parent plus loans and student loans.

Paying for College
1

<p>hello,
i have a question upon taking out loans.
so my parents are taking 19k parent plus loans.. i know... its a lot.
and i still have to take out several sutdent loans.
ive saved up to about 4300 so far.
i was thinking using that money instead of taking out student loans.
would it be better to just contribute it to 19k and decrease the amount of parent plus loan?
i have to pay back the parent plus loan after graduation.</p>

<p>i have 2000 of perkins loans, 3500 of sub stafford, and 2000 iof unsub stafford.</p>

<p>also i was thinking taking only unsub student loans. so the interest wont accrue.</p>

<p>pls help me decide which one i need to take out.
thank you!</p>

2

<p>i have to pay back the parent plus loan after graduation.</p>

<p>WHAT???</p>

<p>You’re borrowing the max Federal loans AND you’ll be responsible for the $20k per year for parent plus loans? </p>

<p>That means you’ll be owing over $100k at graduation (80 + about 30)!!!</p>

<p>That is toooo much!</p>

<p>What is your likely career?</p>

<p>How much do you think you’ll be earning when you graduate?</p>

<p>Do you have any idea of how this will damage your adult life?</p>

<p>What college is this? </p>

<p>What cheaper alternatives do you have?</p>

<p>Have you read the 2 threads that currently discuss a similar situation? That student is now drowning in debt.</p>

<p>Are you the same student who was considering not doing work-study and just borrowing more???</p>

<p>BTW…since the unsub rate is lower than the Plus rate, you’d be silly to reduce the unsub loan before reducing the Plus loan. the fact that you didn’t think of that suggests you have no idea of the financial impact of what you’re doing.</p>

3

<p>Are you going OOS to Purdue or OOS to Georgia Tech.</p>

<p>I can tell you that NEITHER school is worth a 6 figure debt or anything close to that size of debt.</p>

4

<p>I think the OP’s plan is to do pre-pharmacy at Purdue…although $100k in debt is not atypical for a PharmD graduate (after 6 years), I’m not sure why s/he’s only going OOS for pre-pharmacy. It’s obviously unaffordable, most states have an instate public COP and pre-pharmacy prerequisites can really be done at almost any school. Purdue doesn’t give much aid to OOS and I think they tack a $7K annual upcharge on pre-pharmacy tuition (idk why…these are undergrad science/math classes required for many majors), doesn’t guarantee admission to the professional phase, and gives strong preference to Indiana residents (although they also give some consideration to their own prepharms there is no guaranteed seat). Purdue’s PharmD’s have an average prepharm gpa of 3.6 so you’re going to have to excel academically in some pretty tough classes to have a chance at admission in two years. I’m not saying you won’t, just beware that some of these are likely to be weeder courses given they accept 325 prepharms which is more than double the number of PharmD slots they have and they also accept outside applicants… my impression is that no more than 40% of their prepharms will be accepted to the professional phase. You’ll likely also need pharmacy and volunteer experience to be a competitive applicant, and at least two LOR’s for the PharmCAS app.</p>

<p>But, hopefully you know all that you’re up against…my concern is what happens if you change your mind? You’ll be “trapped” pretty quickly due to your high loans and many pre-pharms change their minds/majors. Even if you’ve already thought about it a lot and done a lot of pharmacy shadowing, it’s difficult to know that it’s really right until you’re at least a year into school. After two years, you’ll have $40K in debt and that will have an impact on what other schools/majors you can consider if it turns out that pharmacy is not your true calling! If you aren’t accepted to Purdue’s PharmD program and have to take the PCAT and apply elsewhere, you’ll be no better off than if you had completed your pre-reqs at your own instate public.</p>

<p>Sorry, I think Purdue is a good school, but I don’t like this plan (news flash, huh?) because I don’t like to see young people getting stuck before they even start and debt has a way of limiting options to a soul-sucking, mind-numbing degree. I know it’s late in the game for admissions, but please talk with your folks and see if you have any other options that will leave you with less debt and/or more choices for pre-pharmacy. Then ace your pre-reqs, take the PCAT, and apply to Purdue and other schools for the professional phase!</p>

5

<p>If the student is going to Purdue for pre-pharm and borrowing about $26k per year, then that is just crazy.</p>

<p>Only the first few (3?) years will be at the rate that needs $26k per year. Right?? Won’t the last 3 years require you to borrow even MORE? </p>

<p>I’m estimating that you’ll end up with at least $180k in debt (maybe more). That’s waayyy too much - even for a pharm grad. </p>

<p>Seriously, this is such a bad plan. Your parents are very unwise for going along with this Parent Plus deal that you’ll have to pay back. </p>

<p>BTW…Clarify something…how is it that your parents can afford to borrow (and qualify for) such a big amount, yet they can’t pay it back themselves? </p>

<p>If they don’t have a large income or they have a lot of personal debt, don’t be surprised if they only qualify for the Plus loan for a year or two, but are turned down after that. That is a common problem. </p>

<p>You need to find out now if your parents would even qualify to borrow (in total) such a large amount.</p>

6

<p>M2CK, unlike private loans, there is no credit score check for Plus loans. Afaik, the qualifications don’t change based on previous loan history - they screen based on history of bankruptcy and seriously delinquent accounts only. Unless the parents don’t make the monthly Plus loan or other payments, they’ll likely continue to qualify. In other words, although it may be a really bad idea, there is not a “sanity” checkstop. This debt will affect the parents’ ability to get other loans/credit they need for other purposes though. And, regardless of their understanding with the child, the loan is in the parent’s name and s/he will ultimately be responsible for repayment of the debt. I’m not sure why any rational person would agree to this if it’s unaffordable but people do it all the time and generally have BIG regrets!</p>

<p>OP, I sincerely hope your folks can afford the monthly payments (if they’re deferring while you’re in school the interest is going to snowball) without jeapordizing their retirement. If you haven’t already done so, please go to the loan calculators at finaid.org and make sure everyone understands what these payments will be and has a solid plan how they’ll be made. I did this for my (pre-pharm) D and it was an eye-opener for her…even a $90K starting salary won’t cover unlimited debt and the PharmD shortage which led to signing bonuses and 100% placement rates is generally thought to be over.</p>

7

<p>^^^</p>

<p>There have been parents who’ve posted who have been turned down for subsequent Parent Plus loans in later years and have asked what they can now do. So, there must be some kind of credit check. There was a single mom who recently said that although she’s not in any kind of default or behind, she was denied for her daughter’s 3rd year of Parent Plus loans. </p>

<p>I think the standard may be easier than a private loan (not sure), but it can’t be a given since the mom above was denied.</p>

8

<p>Idk, these are federal regs and they don’t have any other requirements than the ones listed. I suppose it’s possible that the some lenders (FFEL) aren’t following the rules or, more likely, that the posters should check their credit reports for errors and make sure they are meeting all the other eligibility requirements (which are not all related to credit checks) The Chase website gives a good, detailed description of what’s required for their Plus loans:
[FAQ</a> - Federal PLUS Loans - Chase Student Loans.com](<a href=“chasestudentloans.com - chasestudentloans Resources and Information.”>chasestudentloans.com - chasestudentloans Resources and Information.)</p>

9

<p>^^^
Well, I think when Parents take out Plus Loans, they should have to sign documentation that indicates that they and not their child will be solely responsible to pay the loans back. I realize that when they take out the loan, they are responsible, but I think if they had to sign an additional form that specifically states that they and not their child will pay back the loan, many parents would stop this nonsense of taking advantage of the easy credit and then over-burdening their child with huge debt.</p>

10

<p>Much too much in loans. You would be better off going to a school where you would not incur so much debt. </p>

<p>

You have it the wrong way round. The unsub loans are the ones that accrue interest from day 1. It is the sub ones that do not accrue interest until you graduate or drop below half time.</p>

11

<p>^^^</p>

<p>True, but the Plus loans accrue at a higher interest rate, so THOSE are the ones that need to be lessened.</p>

<p>That said, of course the entire scenario is insane. Too much debt.</p>

12

<p>You’ve got the student loans backwards. The unsubsidized Stafford loan interest DOES accrue while you are in school. The cheapest loan you can get in the fall of 2010 will be a SUBSIDIZED Stafford, which won’t charge interest while you’re in school and will only charge 4.5% after you leave. The Perkins loan is only slightly more expensive as it charges no interest while you’re in school and 5 percent after you leave. The unsubsidized Stafford will build up 6.8 % interest while you are in school and afterwards. Your poor parents will be paying 7.9 percent PLUS 4 percent in fees, which brings the total cost to more than 8 percent a year.
Kim Clark</p>

13

<p>Wow. As a parent of a new freshman…the average parent/student has to borrow money. At least where we are from. If you do not borrow the money, then the student does NOT get to go to college. Period. </p>

<p>I do understand the mass of debt. I do understand the difference in the loan options. We do not qualify for any grants/free money. My s can get a small unsubsidized loan - only totaling about 1/4 of the total cost of one year. That other $15000 has to come from somewhere. Not everyone can get the wonderful merit scholarships. Average kids don’t get them. My s finished in the top % of his class and still only got a $1000 scholarship to his school. Most of their scholarships are for ‘perfect’ achievers, not the average A student.</p>

<p>That being said…the money has to come from somewhere. I would rather borrow the money on a plus loan (and did) than tell my child I cannot afford to send him to school. What kind of future would he have? We have saved some, but not enough. We are average, so no big bucks here available. Not everyone has the money tucked away.</p>

<p>That being said, we, his parents will pay back the parent plus loans ourselves. The payments begin immediately with interest. </p>

<p>I agree that it sounds like a lot of debt for the poster. However, I can only imagine how horrified they feel right now after reading all the previous posts. For some of us, getting into college wasn’t the hard part, paying for it is. Please talk to your financial aid office. They will be able to go over all your options and help you find the best way to pay for everything. You are required to do loan counseling before you are allowed to take out a student loan of any kind. It will explain how each works. Ask your FA office ANY questions, they are usually really good to help.</p>

<p>Plan smart. Consider ALL your options. Good luck - it will be fine.</p>

14

<p>The problem is, for a lot of borrowers, it will not be fine. This is not like mortgages, bad loans will never go away. Often, the kindest thing you can do for your child is to say you can’t afford it.</p>

15

<p>There are many options other than taking out massive loans. You can go to a lower tier less expensive state school. Live at home and commute. Go to community college for 2 years and transfer. Take a gap year and work 1 or more jobs and save earnings etc. There is no reason to take out 20,000 a year in loans for an undergrad degree.</p>

16

<p>You have to pay for ANY college. The ‘cheap’ schools around us are all about $16000 a year. It is 25 miles away. Definitely commutable. That money has to come from somewhere. I think you all underestimate the fact that average kids don’t have the money sitting in a bank account. You can be an average person , not poor, and still not have money for college.</p>

<p>I agree that you shouldn’t try going Ivy league when you cannot pay for it. Hopefully your grades will be enough to get you in & pay for it. Work study, part time jobs, etc are all wonderful ideas. But in the end, that isn’t always going to be enough. </p>

<p>I also agree that massive loans are a bad idea. Obviously, some of you don’t have any issues just paying for college. Good for you, but not everyone is fortunate. An education shouldn’t be just for the wealthy. I am sure that’s why they came up with student loans.</p>

17

<p>Checkers, I think you misunderstand our replies - the OP and her family are considering taking out $26,500 in loans for her first year alone so that she can attend an OOS public. First, as you note, there are likely other options which would be less expensive. But the real problem is that the student states s/he will be paying back the Plus loans after she graduates from a (minimum) 6 year program which is also very competitive and not easy to stay in. It’s one thing for parents to borrow their EFC through Plus and make the payments, it’s quite another for the student to assume that responsibility before they even step foot into their first class!</p>

18

<p>*I do understand the mass of debt. I do understand the difference in the loan options. We do not qualify for any grants/free money. My s can get a small unsubsidized loan - only totaling about 1/4 of the total cost of one year. That other $15000 has to come from somewhere. Not everyone can get the wonderful merit scholarships. Average kids don’t get them. My s finished in the top % of his class and still only got a $1000 scholarship to his school. Most of their scholarships are for ‘perfect’ achievers, not the average A student.</p>

<p>That being said…the money has to come from somewhere. I would rather borrow the money on a plus loan (and did) than tell my child I cannot afford to send him to school. What kind of future would he have? We have saved some, but not enough. We are average, so no big bucks here available. Not everyone has the money tucked away.</p>

<p>That being said, we, his parents will pay back the parent plus loans ourselves. The payments begin immediately with interest.</p>

<p>I agree that it sounds like a lot of debt for the poster. However, I can only imagine how horrified they feel right now after reading all the previous posts. For some of us, getting into college wasn’t the hard part, paying for it is.*</p>

<p>I see from another thread that your son is going to Mizzou. That’s great. :slight_smile: </p>

<p>However, a student doesn’t have to start at a 4 year university if money is an issue (and especially if there are younger siblings who will be following). </p>

<p>Your post suggests that you’ll be borrowing about $15k for the first year. Multiply that by 4 years and you’re talking $60k in debt (repayments will be about $800 per month).</p>

<p>Now, if you have younger children and you’ll have to do that again, soon you’re talking 120k or more in debt (Payments could be about $1600/month at that point). I find it hard to understand how people can pay that much back each month when they can’t pay much in real time towards college. That’s how these student loan/Plus loan problems start. </p>

<p>I can understand the position of not wanting to deny college to a child, but starting at a CC or a state school that is commutable would certainly reduce the total debt by quite a lot.</p>

<p>And, there are lower tier schools that give good merit for just avg stats.</p>

19

<p>First of all, your student loans rates are lower than what is offered through PLUS. So, if you are taking on the PLUS loans, you are better off lowering those loan amounts first. that still leaves you with an awful lot of loans as everyone is saying. $7500 of the students loans that are offered to you are really about as high as you should go. If you can reduce your parents loans by about $4000 and have them take out $15K a year in loans, but with THEM, not you repaying it, it would be a much more reasonable situation. Remember, this scenario is going to repeat itself each year.</p>

<p>You will still have to work during the year to meet expenses for which you are not yet being billed. The total COA for a school is a few thousand more than what it bills to you. You are thinking of taking on an awful lot of debt for an undergrad degree.</p>

20

<p>I just got in to college of william and mary off the waitlist and will attend there!
As much as i was worried bout the tuition of Purdue which is enormous, im so glad i got into WM since its wayyy cheaper and it’s a really good school :slight_smile:
I still like purdue, so i wish i would be able to get into their pharmcy program later on…</p>