Pretty screwed ..

Paying for College
1

<p>for whatever reason, I haven't applied for financial aid yet. i did most of the application and profile today, but I ran into a problem and called in - they were closed. i'm not going to get this "in" until tuesday now (because of the holiday). my school says it'll take about a week and a half for them to get back to me, putting me in the second week of july. tuition is due early august. </p>

<p>my father is unemployed / self employed. he gets disability insurance of about 72000/year. my mom's a doctor and makes about 220,000/year. we have about a 200,000 credit card debt. tuition for next year is upwards of about 50,000. i have a brother in med school and we have a house that we owe 800,000 on. </p>

<p>i'm expecting my EFC to be extremely high. i don't know what they'll give me. regardless, i don't know what im supposed to do this late in the game. if my EFC is upwards of around 30000-35000, I NEED private loans. should i start calling companies now? i don't know what my EFC will be or how much i'll exactly need - so what do i tell them? how long does it take to get approved once I apply? </p>

<p>pretty screwed.
guide me.</p>

2

<p>From the information you provided regarding income, my best guess is that you will receive no financial aid whatsoever. You missed any deadlines for merit aid. The income you indicated disqualifies you from any federal or state financial aid – and you are unlikely to qualify for any institutional financial aid due to a combination of high EFC and limited funds (most schools require the profile and FAFSA to be filed by early spring and anyone who files later gets very limited FA).</p>

<p>Every student may borrow money in the form of a stafford loan – but the amount is somewhere in the neighborhood of $3500, which won’t make a big dent in the total bill.</p>

<p>Also – credit card debt doesn’t figure into the EFC figure neither does the mortgage on your house (except that it reduces the amount your house is worth as an asset). Your brother’s med school tuition usually isn’t figured in either – since he already has an undergraduate degree, he is an independent and responsible for paying his own tuition (even if he doesn’t) You don’t mention any other assets (second home, stocks, bonds, bank accounts) but these would all increase your EFC even more.</p>

<p>You need to do two things – sit down with your parents and ask them how much they intend to contribute to the cost of your education and look for other options in terms of education.</p>

<p>No one in their right mind would encourage you to borrow $200,000 to pay for an undergraduate degree nor are you likely to find anyone willing to lend you that amount of unsecured funds.</p>

3

<p>The EFC usually comes out to ROUGHLY (VERY roughly) 1/4 to 1/3 of pre-deduction income. I don’t know if your dad’s income will count, but even if it doesn’t, your EFC will most likely be $55,000 or higher. That’s higher than the COA, meaning that unless you qualify for merit aid (you must not have or must go to a school that doesn’t give out merit aid), you are not going to get any money.</p>

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<p>$200,000 in credit card debt? :eek: That can’t be right.</p>

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<p>It is possible that $200,000 in credit card debt is right.</p>

<p>You need to forget about going to a college that costs $50,000 per year. You will qualify for no financial aid and your family can’t afford to send you to an expensive school, they can’t even seem to afford their own life.</p>

<p>Just forget about it. A lot of kids are in the same position you are in, they can’t afford a $50,000 per year price tag. Take a year off, work and next year plan on going somewhere way less expensive.</p>

6

<p>200 THOOOUUUUUUUSANDDDD DOLLLARRS
whats the interest on that, maybe higher than most peoples credit card debt lol</p>

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<p>Sadly, it sounds like living way beyond your means is something you’ve learned at home. It’s not a good way to live. Please don’t start out your own life that way.</p>

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<p>OK…I’m not a bank loan officer but I will venture an opinion. If your family has $200,000 in credit card DEBT, and a mortgage on a house, I very seriously doubt that any reputable lender will even GIVE you a private loan. That is just too much debt to carry…and ADD to. </p>

<p>I think you need to look for a less expensive college option.</p>

9

<p>I don’t know what that reason was for you to apply so late for aid – wasn’t financial aid one of your factors when applying to college? or rather, shouldn’t it have been? Anyways, no use trying to take back spilled milk. </p>

<p>I think Pea’s advice is the most salient – take a year or two off, work, and try to save towards a school that’s far less expensive, since 97% of merit aid deadlines are pretty much past for this school year.</p>

10

<p>Call the Duke financial aid office and ask them the questions you are posting here. I think the answers will not be favorable, but they can answer them better than we can. ALL of the merit deadlines for Duke have LONG SINCE PAST. It is unlikely that you will qualify for need based aid.</p>

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<p>do some math and figure out what $290,000 equates to per month. we can afford the house, and we can afford to pay off the debt. we’re on track to pay it off in 14 months.
you are all right - you ARENT bank loan officers. you all flipped with a debt of $200,000 without noticing the yearly income. </p>

<p>i asked if i should be waiting to contact banks before I heard from the FA office.
since most of you told me to take a year off, lol, i decided to heed a friend’s advice and called in anyway. I was already approved for 3 loans with interests under 8%, not to be calculated until 6 months after graduation from graduate school, if i choose to attend.
i’m a premed most likely. i have no problem taking out that loan and paying for it when i’m a surgeon. </p>

<p>there are MANY physicians taking out loans similar to mine for undergrad and med school - they pay it off their first few years working.</p>

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<p>Sorry, but your family’s debt (220k +800k +50K for first year of college) is almost four times their pre-tax annual income (292k) , so paying the debt off in fourteen months is unlikely, unless there is financial information you haven’t provided. Fortunately it doesn’t matter, because you have worked out your concern with loans and are satisfied with the outcome. Congrats and good luck!</p>

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<p>You’re the one who asked for our advice and then you insulted everyone. “Flipping out” over $200,000 of credit card debt is the appropriate response and if you don’t know that then you’ve learned your parents irresponsible habits. Everyone took note of your family income, any level of income can be outspent and your parents are proof of that.</p>

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<p>They do not pay it off after a few years, it takes most of them much longer. You don’t understand money management, it’s not your fault, your parents are terrible role models.</p>

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<p>People with 2-3 times of your parents income have less than 10,000 credit card debt. 200,000 credit card debt is huge. If you are going to medical school, I would strongly suggest for you not to take out 50,000 loan per year. Doctors do not make that much money nowadays, not since HMO came about. One of the best doctors in our area just did a procedure on my daughter. The bill was $535, but the insurance determined it was only worth $125, and that’s what the doctor is going to get paid. Your mother is a good example, as a doctor she is only making 220,000.</p>

<p>A 200,000 student loan at 7.5% paid over 10 years, your monthly payment would be $2,374. This is before you take out any loans for medical school. Your parents are highly educated people. It is irresponsible of them not to have made your aware all of these financial issues.</p>

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<p>
[QUOTE=talk<em>about</em>ambition]
i have no problem taking out that loan and paying for it when i’m a surgeon.

[/quote]

If you’re being honest and serious with your latest post, you might want to watch the political situation very closely before committing to this pathway. One idea being tossed around quite seriously in healthcare (and now with precedent in other sectors) is a salary cap for healthcare professionals. That would hit you and your parents, leaving you with mountains of debt and no backup. Their own mountain of debt (and debt above five times one’s annual income is a mountain, especially when a large chunk of it is high-interest credit card debt) could leave you working your butt off to support them.</p>

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<p>And student loan debt is generally not discharged by bankruptcy.</p>

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<p>You have attacked people trying to help. If you did any of the fafsa or profile worksheets or sample apps, you would know by now that you would have an EFC greater than or equal to the cost of attendance, and that credit card debt of 200,000 does not reduce your families expected contribution. And if there is enough income to pay off that debt in the next 14 mos, while still paying mortgage and living expenses, then you certainly don’t qualify for aid. </p>

<p>Debt of 50,000 a year for 4 years, followed by another 50,000 a year for 4 years of med school is 400,000 in principal alone. Even at 8%, if you wait and start making payments during residency, you will be straddled with payments of $5000 a month. And a surgical residency is 5 years, a subspecialty is another 2-3. Sure, your making a paycheck, but not enough to live on and repay that kinda debt. And if you borrow $200,000 for undergrad, you will not be in a position to be able to borrow more for residency. No bank is going to loan another $200,000 to a student with $200,000 already in debt, whether they are accepted to professional school or not.</p>

<p>I went through college and med school totally on loans, with some merit aid thrown in. And this was back in the day where graduating with debt of $50,000 was ALOT. I married a guy with student loan debt of his own. He had another $10,000 for his BSW degree. I did not defer payments for residency, and started paying as soon as I had money coming in. Even with moonlighting in rural ER’s during my 4 year residency, it still took 4 years residency and 10 years of practice to pay eveything off. Funny, but salaries in medicine have been flat for 10-15 years. I CANNOT imagine trying to pay of $200,000, let alone $400,000 in principal alone on a surgeons salary in this day and age. Medicare pays about the same for the major surgery I do now as they did 10 years ago. Blue Cross and Blue Shield pays HALF–you read that right----Half of what they paid for the same procedure 15 years ago. </p>

<p>With managed care, HMO’s, and the talk of a single payer system, we are trying to give you some serious advice. And be real, if your mom is a physician with kids old enough to be in college and med school, and she still has a mortgage balance of $800,000 and credit care debt of $200,000, she is finding cash flow to be a problem, even after practicing for years. I can relate. We are sincerely trying to warn you that your plan to borrow upwards of $400,00 to finance 8 years of college and postgrad will just not work.</p>

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<p>The devil is in the details. The total amount of money you’ll be receiving, whether the interest rate is fixed or variable, if you’ll need a cosigner, when interest starts accruing, all of these bits of information need to be verified. It’s highly unlikely in this day and age that a random undergrad can make a few phone calls and be approved over the phone for $50k in student loans where interest is deferred until finishing grad school. Either you’ve not revealed all, OP, or you’re about to get scammed big time. </p>

<p>The only way that a family with roughly $300k in annual income could retire $200k of credit card debt in 14 months is by using other resources, savings, or money from family. There might be no taxes paid on the disability income, but the remaining $220k income is subject to state, income, and other taxes. The $800k mortgage needs to be serviced. At best, that couldn’t be lower than $5-6k a month. If your father will return to work in the near future, that might help if his income is far greater than his disability pay. But your parents might need that money for other purposes. I’d wonder what their entire financial picture looks like. </p>

<p>It just doesn’t add up. The OP might not have told us everything. Or maybe the OP just doesn’t have the entire financial picture for his/her family.</p>

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<p>Wow. Just wow. I am speechless. Hope it works out for you, OP - I mean that with all my heart - because I hope I (as a taxpayer) never end up shouldering the burden of defaulted loans in your name.</p>

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<p>I don’t want to sound snarky, but if your parents are REALLY able to pay off $200,000 in credit card debt in 14 months…why don’t they either charge your college education on their credit cards or take money out on their line of credit with their credit cards…and then pay THAT off in 14 months. It would surely be less time than a conventional loan.</p>

<p>Your parents may earn $292,000 a year, but unless they have some plan that is different than most folks, they are paying taxes that amount to a goodly sum of that amount (on the $220,000 of your mom’s income anyway). Their take home isn’t nearly that amount. Subtract about a third to figure out their take home pay.</p>

<p>You asked for some opinions and you got them. It clearly wasn’t what you wanted to hear. I stand by my original statement. Another conventional loan (favorable interest rates…not loan shark rates) will be hard to come by UNTIL a good portion of this debt is paid down.</p>

<p>To the OP…clearly you have a plan for getting these loans. I hope it all works out for you and your family.</p>