I promise to take a look on Friday. I spoke to my parents. They believe my grandparents can cosign and we will all work together to pay off the loans afterward. This at least makes me feel a little better. My grandparents have great credit as far as I know so I think it shouldn’t be a problem from what I’m hearing? I’m nervous still but does this sound a little better to anyone?
My parents also mentioned the parent loan thing that some of you mentioned. So to answer all of the questions about it, I’d get the money through a loan from a bank with them cosigning. I asked my parents to look more into all of this before Friday.
Thanks for all of the advice. You guys definitely know more about this than me, I wanna figure this out now before it’s too late
Okay, you want to know how you can do this…You can borrow $5500 in year 1. Your parents will need to pay/borrow the rest (directly or via co-signing). Can they? Will they? Do they have the credit to borrow? Would you ask this of them?
Better talk with your parents about the realities of this.
Let’s see what you can find on Friday. Maybe you won’t even have to deal with iy. These folks here are really good at helping ppl find a better solution.
Also, if anything (God forbid) were to happen to you, you’d leave them with the responsibility of repaying this monstrous loan. This thread is generating a lot of discussion because people really do not want to see you and your family in this situation.
I am not sure you fully understand how loans work.
When you apply for a private loan, the lending institution looks at both your credit score AND your ability to repay a loan (income and assets). As you borrow money each year, your ability to repay goes down since your debt to income ratio increases. At some point, you will not be able to qualify for a loan and the lending institute will not lend you more money regardless of your credit rating. Also each year, the interests rates will likely be higher since your overall credit worthiness will decline each year. This is why, posters are concerned that after the first year or two you will not be able to borrow enough to continue. At which point, you will be forced to withdraw and then will be faced with repaying these loans without a degree. At that point, your options are severely limited.
When people cosign loans, it legally contracts them to make he payment if you fail to make them.
Parent Plus loans work differently. As others posted, your parents may be able to borrow for the four years but it is VERY risky to carry that amount of debt. Sure people do it. That is why you see a constant stream of stories about people who are bury in debt with no way out. These loans generally cannot be discharged in bankruptcy. The current rules make that option virtually impossible. Also the interest on these loans are higher since they are unsecured. The interest alone for a 40K will cost about 3K per year! Since these loans are in your parents names, it will make it harder for parents to borrow for their own needs.
The reason that posters are pushing community college is that route allows a reasonable cost way to fulfill your general education requirements. After earning the two years of credits, you can transfer to a 4 year college. Most CC will have agreement with the in-state colleges to guarantee your credits will transfer. Your degree will carry the same weight as the student who spent the full four years at the school. Your debt load will then be a lot more manageable .
I know many students feel that CC is for the losers and slackers or that they worked too hard to end up at CC. The reality is that CC will have a mix of students ranging from those that need help becoming college ready to some very bright kids who worked just as hard as yourself but couldn’t afford the 25-75K per year for 4 years. Those bright kids will be working their a$$ off to get a high GPA that will allow the to transfer when the time comes. If you pick your classes carefully, you should be able to surround yourself with like minded bright kids.
One last note. You mention that your parent can pay 11K per year. You have no idea how generous that is. Many parent are unable or unwilling to offer that support. Thank them and try to work out a solution that does not put your grandparents and parents in a financial bind in future years.
Let me put the $100,000 loan payments in perspective for you.
Keeping it simple, let’s just assume an average 5% interest rate.
For a 10 yr payment term:
$1060/month
For a 5 year payment term:
$1890/month
That’s enough money per month to go on a cruise vacation every month. That’s money you’ll be paying back EVERY MONTH for 10 loooooonnnng years instead of buying a house, buying a car, building retirement security.
At age 18 now, can you EVEN remember back 10 years???
Let’s say that when you graduate from college, you’ll get a $60k job. Your take-home pay will be ~3500/month. One-third to one-half of your take-home pay will be going to servicing your student loans.
Your grandparents will be paying literally for the rest of their lives. DO NOT DO THIS. Even if your parents and grandparents want to. This is foolish.
I think you are stuck in the idea that everyone should be able to afford a state flagship. It just isn’t true anymore, especially in PA. Don’t you dare ask your grandparents to take out loans because you are too proud to attend a directional or a college you can commute to or a community college.
You absolutely need to go a cost effective route if you want to truly finish college w/o financial disaster. And it is a financial disaster for the type of loans you are proposing for UG degree. I have heard many consider their student debt like a heavy chain pulling them down from their neck that they are dragging along in life.
The average student dept for kids graduating is $30K. Many don’t graduate and have debt they are trying to pay off, or school bills they are trying to pay so they can get their transcript and continue at a cheaper school.
Re-examine more affordable options, and take a gap year if necessary.
My niece just got her first post college job with a salary of $45k. After taxes, rent, utilities, etc, we figured she’ll have about $1000 to live on, for transportation (she has no car but needs a metro pass), food, clothing, entertainment, cat food and supplies,. Her parents still pay for her health insurance, phone, AND student loan payment (their gift to her). If she had to pay a student loan payment, she could not have taken the job and would still be living at home working a $10/hr job.
If you want to go away to college now, do you really want to live at home at 22? How do you know if you will find a job close to home where you would make a good salary with your degree? Even if you would pay $2000-$3000 a month it would take you several years to pay that money back.
Penn State is not the only option. Students change their minds about colleges all the time, that’s why they have waitlists. If after May 1 someone decides not to attend, the school can give the spot to a student on wait list.
You can still decline. You might lose your deposit, but that’s only a few hundred dollars, better than thousands of dollars of debt. What happens if you start at PSU and then you or your family can’t borrow anymore, then you will have to leave. If you owe them money they won’t release your transcript.
It’s better to make a plan in how you can reach your career goal in an affordable way, with only modest amount of loans.
You can still call SH and say you changed your mind and you want to attend. You never know.
There are colleges that still accept applications that cost less. For example UMass Lowell has a date of June 1st.
Don’t go to PSU.