perkins loan ending

I know that I should call the financial aid office, but until morning, I thought I’d ask here!
My daughter received her financial aid package from Tulane the other day. It included a Perkins Loan. It’s my understanding that this loan ends after this year. My concern is that for the subsequent years (she will be a freshman in the fall), we will need to cover the perkins amount ($5500). Has this loan been replaced with any other loan?
Thanks!

I don’t think the government has replaced it with anything, and it seems unlikely to me that they will. Does your daughter already have $5500 in federal direct loans as well? If so, you’d presumably have to replace any Perkins loans this year with the additional $1000 she is allowed in direct loans sophomore year, and other loans like Parent plus or private loans, if necessary.

No, nothing to replace it through the government. She will have an increased Stafford loan amount for sophomore year of $6500, and $7500 for the two years after that. You (parents) could take a Plus loan, but those have a higher interest rate, aren’t subsidized, and have a higher origination fee.

$5500 in Perkins loans plus another $5500 in Stafford loans for freshman year is a lot of loans for a freshman to take out.

Are you sure that your incoming freshman daughter was awarded 5500 in Perkins loans AND 5500 in Direct loans?

Are you seeing 11k of loans in her pkg?? If so, that’s too much anyway.

I"m so glad I asked. I need a crash course in Financial Aid!

So yes, her package is actually $15K in loans. $5500 Perkins, Fed Direct Subsidized $3500, Un subsidized $2000 and work study $4000. Her Tulane scholarship is $47,200. So from what you are all saying is the loans ($11K) is too much. Which is what I thought! Especially as it still leaves me with $8000 and then if Perkins ends, the $5500 the following years.

Is it worth calling and asking if they will increase her scholarship to cover the Perkins amount? She hasn’t made a decision yet, as we are waiting on other schools (and aid packages!) Prob better to wait and call when we have other school packages in hand.

For us, travel cost will also be a consideration so the cost will go up somewhat significantly, considering she will need to fly there!

The $4000 won’t be there on day 1. She has to find a job and earn that money. It’s a good thing, but it can only be used for expenses after she earns it.

It’s February. If you both start putting away money right now, you should have several thousand saved up by September. She could spend that and replenish it with the work study money she earns for the next term, etc., etc. If you are going to try to cover $8k a year, that’s about $700-1000 per month (if you figure you also have to cover travel, books, start up costs). If she’s going to contribute $4000 by working, that would put you in a good place.

You can ask them to provide more in grants, but $47k is already very generous.

You could ask if they would offer a grant to cover the Perkins in later years, since the aid was need based. But they might not, and costs can also increase year to year.

Can your D work this and all subsequent summers, how much could she earn? And would you qualify to claim the AOTC (American Opportunity Tax Credit) of up to $2,500?

But you will need to think about if $15 k in loans, plus travel costs, books, etc is going to be possible.

Also check into Tulane’s health insurance requirement, to make sure your coverage is sufficient.

Since the school doesn’t promise to meet need, it may just replace some/all of it with a Parent Plus loan.

Frankly, it’s rare for a school to offer THAT MUCH in Perkins, because it leaves the student with too much debt.

What is your DD’s major and career goal?

Does she have more affordable options?

Does your daughter still want to go to med school? @mom2collegekids can advise you about how to approach undergrad for med school hopefuls, but I think avoiding debt will be important. A 1340 SAT seems pretty good to me. Did she apply to schools that offer guaranteed merit? How much can you pay per year without borrowing?

I just looked up Tulane’s policies. It looks like they don’t promise to meet everyone’s full need, but they do promise to meet full need and without any loans for families under $75K adjusted gross income.

So if you have under $75K AGI, you have a good argument for a lot more aid. But otherwise, you can ask if there is a way to get some aid to lower the Perkins amount. And definitely ask if they will adjust aid next year when there is no Perkins. $11K (or more) each year of loans seems too much.

@immomtoone

If your daughter is interested in going to med school, $15K/year in loans is too much debt for undergrad.

FA for med school is loans, loans and more loans. Grant aid is nearly non-existent and typically for small amounts only. (A couple of thousand dollars.) If she is carrying substantial loans from undergrad, this will impact her ability to take out enough in loans to pay for med school and makes her life during residency and afterwards much more difficult. (Medical residents are not paid well so trying to pay off loans or even just staying current on the interest payments during residency is tough.)

Tulane is a great school (my next door neighbor’s daughter attends Tulane), but its name won’t help your D get into med school. Med school admission is GPA + MCAT plus ECs.

I’ve sent 2 Ds to med school–both took merit money and had little debt from undergrad. Even though she minimizing her undergrad debt, D1 is finding staying current on her med school loan interest payments is hard since she ended up doing her residency in high COL area.

A quick look on Tulane’s website lists 2017/18 tuition & fees at $52,960 and room and board at about $14,500.

That’s $67,460 minus scholarship of $47,200 that leaves $20,260 to cover just for things the school bills for.

That doesn’t include flights, books, (health insurance).

$47,000 scholarship is a great scholarship amount. That is very generous. It never hurts to ask for more but it sounds like your student has received a fairly high amount. Your net cost is about 1/3 of the COA! Fantastic. Congrats to your student for achieving that scholarship. There are many many students who received much less.

The OP mentions having to pay $8000, which does match (sort of) the figures from website. ($8K plus $11K loans is at least within a thousand or so of direct costs, and the daughter could pay for expenses, travel, etc. with savings between now and September and $4000 work-study.)

The question is whether it’s worth borrowing $11K, and whether that number could be lower. Seems like the only ways to lower it are either more scholarship from Tulane, maybe an outside scholarship, or a parental contribution of more than $8K.

Yes, the question is whether it’s worth it and possible to pay $20,000 plus a year with a combination of loans, parent contribution and student work earnings. Especially if D is looking at a lot more debt with med school.

In the first year the loans offered to the D were $11,000 and parent would need to pay $9,000

In the second year the cost might rise to $21,000 and the D could only borrow $6,500 and parent would have to pay $14,500.

Then in year 3 and 4 the D can borrow $7,500 and if costs rise again the parent might have to come up with $14,500-$15,500

<<<
is wanting to major in Bio/premed. Any suggestions on East Coast safety/targets?!


[QUOTE=""]

[/QUOTE]

Oh wow…premed? If so, then really the goal should be very little or NO undergrad loans. Med school loans can be HUGE…$200k-350k.

I’m guessing that she retook the SAT and ended up with higher than a 1340 SAT since her merit was that large from Tulane.

@WayOutWestMom has been thru the premed/med school process twice with her 2 DDs, and I’ve been thru it once with my son. The goal should be minimal loans.

Wow! You’ve all been so helpful and I need to continue my crash course in financial aid over the next few weeks until the regular decisions come in!! I am def worried about loans, particularly the Perkins if it won’t exist next year and it’s the highest amount of money! I didn’t realize the work study piece would not be upfront (though of course that makes total sense!) She will work this summer so that will help with expenses.

@mom2collegekids yes better SAT second time around.

As mom2 mentioned, Tulane does not meet 100% of your need. AND … they rely heavily on self-help (loands and work-study). They awarded the same perkins loan FA for our daughter (similar amounts to yours, all told). If you push out the 11k loans over 4 years … that’s over $40,000 in debt. Definitely not a safe proposition, especially with med school on the horizon.

Also, the ‘no loan assistance’ (NOLA) only applies to ‘tuition related things’ so the entire COA is not in scope. see http://www2.tulane.edu/financialaid/grants/nola.cfm . Even if they review it later and say kid is eligible, it wouldn’t be enough.

Tulane still has work to do to be competitive with the elites it’s trying to join from an FA standpoint. Awesome merit for kids with a high EFC, not so great for low EFC kids.

@lz57c4 can you explain the NOLA more to me? I looked on the website but I’m still unclear.