<p>I'm working two jobs to pay for my son's tuition. Hopefully, I'll be able to pay most, if not all of his tuition bill from my 2nd jobs income. I was thinking of taking out a PLUS loan every year and paying it off by the end of the year, in case I come up short or lose my 2nd job.</p>
<p>Is there any unforeseen problems with this idea, such as prepayment penalties, etc.?</p>
<p>Thanks in advance for any help.</p>
<p>I don't see why there should be. Check with the lenders.</p>
<p>Also, see if you can be put on an installment plan by the college, so that you pay them directly every month/quarter/whatever without having to go for a loan just yet.</p>
<p>Good Luck! I'm going to be in your shoes in two short years!</p>
<p>Just remember that if you take a second job and make an extra, say, 10k, that 10k will increase your income and decrease your financial aid for the following year. that is assuming that you are getting financial aid.</p>
<p>Good Idea. </p>
<p>Some thoughts:
The actual billing of the loan doesn't start until the last disbursement of funds. So if the student is on the quarter schedule, You will get the first bill after Spring break. However, the interest begins on the first disbursement in Sept. Therefore, most parents already have an interest accummulation by their first scheduled payment. You can make your first payment as soon as the first disbursement; But by doing so, this and following payments causes some confusion on the bank...Be sure you keep detailed records, checks, and any accompanying notes/correspondence to them, with written instructions for each check on how the payment should be distributed to principle and interest. This is not unique to any particular lender. Some lenders will be really confused on this, because their computers are not programed to recalculate advance payments and their clerks have not been trained to handle this. WaMu and Countrywide are especially confused on prepayments on their mortgages.</p>
<p>Student loans will be be in turmoil until we get the subprime lending problem solved. So look for possible changes beyond the changes to take affect in 2009. </p>
<p>Keep liquidity. If you plan to work another job to pay for the PLUS, perhaps, it may be better to bank the funds so that you can pay the PLUS when you want to. Suppose you pay off the first year's PLUS, and because you are working so hard, you get sick. By being sick, you are now without a job which means you no longer qualify for a PLUS. By banking some of your extra money the first year, you now have several options: 1)Pay off the loan; 2) Pay off some of the loan (P +I); 3) Pay interest (I) only; 4) Pay interest only on the 1st year's loand but not take any loan for year 2, and work less because you banked your wages from year 1.</p>
<p>Thanks for all the great advice.</p>
<p>Although my son's EFC was around $18K/year, he only received merit aid, not need based aid(whole other story), so I'm "fortunate" enough to make as much as I want without increasing my son's COA.</p>
<p>Really good idea about banking some of the income for liquidity. The reason I'm skittish about signing up for the monthly installment plan is my 2nd job isn't very secure(who's is these days?)</p>
<p>I also want to take a second job but remember when I made an extra 5,000 my son's first year.....did that screw us up! He lost a grant, I had to scramble to pay more. When I told the FA office I was trying to pay off debt they didn't count, of course it didn't matter. They said unless it was "under the table" every penny would effect grants, not scholarships. Makes sense, but I don't know if every school does "dollar to dollar". If you don't have grants or the money isn't extensive, it shouldn't matter that much. </p>
<p>As much as some don't like Sallie Mae (and I wont use them for private loans) I like their web site for payments. You can pay anytime, any amount, even before payments are supposed to start, you can pick what loan easily and they show you how the payment was applied, what was interest, principle, etc. That I like, because our private loan with NJClass, although a great interest, is not online and I have to be careful to keep scrupulous records.</p>
<p>Yeah, I figured out that about every $1 I made on my 2nd job ending up raising my EFC 50 cents. </p>
<p>All of my son's colleges ended up offering merit aid but no need based aid, so now I have the dubious luxury of not worrying about how much my income from my 2nd job will affect my son's aid.</p>
<p>Sometimes, if you can, if helps to try to pay down loans, C.cards, beforehand if possible. My co-worker "Meg" worked a second job at a large store to help pay for her son's tuition, almost 2 full time positions. She found it placed her out of some money he received and almost quit, but then she decided she couldn't wait 4-5 years to pay off outstanding bills, she wanted to get rid of them now. She still made more than they took and 2 years after his graduation, she quit. Finanical aid doesn't care about the rising cost of gas, electricity, car loans or credit cards. Even large housing repairs I had were steered toward home equity loans. When I pointed out we already had one for things in the past, she paused and said, "oh yes, I see that...well, maybe you can get more."
They don't have to give you anything, and anything you get is a gift.It will never be even, fair or enough for most students, you just have to find a way to live with it (or without it).</p>
<p>Debruns, I agree with you. I was wondering with higher gas prices whether transportation costs would go up as part of COA, but I really doubt that they would budget a more reasonable sum. The truth is that transportation could easily cost 2k less if the student lives within a 30 minute bus route, than if the student's family resides on the other coast from their college. Yet, this is often not taken into account for that student, but the college would still like geographic diversity. I expect plane fares, and gas surcharges to go up. It already costs more for some extra luggage that used to be included. Families at home have higher costs too, as Debruns explains. We have higher food prices, higher gas prices, less home equity now that the house prices went south, so could one expect a better financial aid package based on that? Hmmm, I wonder.</p>
<p>just wondering if the student worked a part time job, will this also affect need based aid?</p>
<p>
[quote]
just wondering if the student worked a part time job, will this also affect need based aid?
[/quote]
It might. The FAFSA formula has income income protection built in for the first $3080 (for 2008-2009) of student income. 50% of any income (not including work study) over the protected income allowance goes to the EFC.</p>
<p>I feel helpless. I want to help my mom pay for my tuition. I thought that if i got a part time job it will help with tuition cost so she wouldnt have to take a second job. But now I'm not so sure :(</p>
<p>I know it's hard, but you do what you can. My son is going to work, probably wont make much over the 3,000, but if he makes 4,000, that's okay. They don't take all of it, and he needs to help pay so we don't need a larger loan.
I wish he was like my niece who always had an "under the table" job at a pizza place, but he can't seem to find those nearby. If he makes anything doing odd jobs, it probably wont add up to much, but then again, anything extra helps. I know we will probably get less help this year, but that might help him with a workstudy job; they seem to be the only ones on campus and he didn't qualify last year
Rainsplash, 3000 is a nice chunk of money if you could make it and most students don't get the hours or salary to go over that by very much. I'm sure anything will be appreciated. It's nice to read that you want to help, so many students just get angry that mom and pop don't want to foot the whole bill.</p>
<p>im thinking about private tutoring when i start in september. I will greatly appreciate anything right now. Hopefully I can get a summer job or two before i start my first year. My goal is to make as much money as i can during the summer so i can save and then focus on school in september.
thanx debruns, ...Its been stressful for all of us and I really understand the financial hardship that my college education will bring.</p>