Private Loan or PLUS Loan? Please Help!

Paying for College
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<p>This reminds me of someone I know, who decided against divorcing her unemployed, abusive husband, because she bought a couch and a TV while she was married to him and she did not want to split that property with him. 15 years later they are still married, he is still unemployed and abusive, but now she does not want to divorce him because she is afraid she will have to split a house with him which she bought using her income while married to him and will have to pay alimony.</p>

<p>This $400 are not that much considering the loan you are trying to take. </p>

<p>I don’t think your plan on cutting down your loans to 50-60K is realistic, because it will require tremendous financial discipline and also the fact that you will be putting all your money towards to loan and not living expenses. Are you not planning to have at least some social life?</p>

<p>Also, don’t count on more scholarships even if you get all As. It does not work that way.</p>

<p>P.S. If your parents don’t believe in community college, ask them if they are willing to take on the entire loan responsibility (without you having any loans in your name).</p>

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<p>Another thing is I have already paid 400$ for VT downpayment, and I have signed a contract for housing/dining, though that may or may not be binding</p>

<p>Your housing and dining contract is not binding.</p>

<p>That $400 downpayment is not really relevant to the big picture and maybe some of that may be refundable. When you’re up to your neck in debt, you’re going to look back at that $400 and wonder why you let it stop you from seeking a more affordable option.</p>

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<p>I know I said I was going to shut up now, but …</p>

<ol>
<li><p>VT is not “the top school” in the U.S. for engineering. It’s a very, very good school, but there are others that are just as good - perhaps even better, at least by reputation. I say this not to put VT down or start a what-school-is-better war, but to say that if that is the reason you’re willing to go into debt so far, you’re working from a false pretense.</p></li>
<li><p>I admit to being somewhat blown away by parents who can’t afford to send their kid to an expensive school (no shame in that, I’m one myself) but then expect the kid to take on a boatload of debt to go to what the parent considers a proper school.</p></li>
</ol>

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<p>I went to a community college and transferred to NC State. I saved so much money by going to a CC first and, in the end, I still have my degree from a great university. It is not worth it to have to struggle for YEARS with huge student loan debt looming over you. </p>

<p>Have you looked into UNC Asheville? I know someone who graduated in engineering there and loved it. He also had a great job lined up two months before he even graduated.</p>

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<p>You have the will to make this work, but you can’t control everything. Are you insane? Actually, I don’t think so. But, at this point, you are assuming everything will go according to your hoped-for plans. Your STEM schedule at school will be tight, arduous, and can change each semester. Many off-campus jobs don’t want to deal with that shifting availability. On-campus jobs/work-study do offer this flexibility, but usually cap out around 10-12 hours. </p>

<p>I don’t want to tell you that you cannot work your butt off and accomplish more than your parents have. But, there is so much up in the air here, including whether you will be a good fit for the engineering program. Have you done superbly in your hs math-sci classes? </p>

<p>If you want to consider a HE loan, you need to know for certain the monthly costs for money you draw. And, that your loan will be approved, in this age of bank wariness. Those payments will be due from the get go, your family income is low and I don’t know that you can just assure the bank you plan to find a job and that mom is trying to get work. </p>

<p>As you pay for each term, the total drawn grows and the monthly payment will be higher. And, in the meantime, you have to eat, pay some rent, buy books, have some way to get to your side job, etc. By the start of 2nd sem of junior year, even if you do earn enough to start paying down the principal, your balance could still be high. Ie, pay down an extra 10k and you’re still paying on a 56k loan, so far. You have to run the real numbers. </p>

<p>And, the problem with non-HE private loans, as someone said, is that after the first one, that hanging debt can prevent further loan approvals. If you take the full 80k now, next year, finaid will see the balance as assets and it can affect your future aid awards.</p>

<p>Run the real numbers, project each year’s monthly loan repayments, see if it still seems feasible.</p>

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<p>You and your family really need to re-think your assumptions and plans. At this moment, NONE of you have jobs to repay ANY loans, especially in the amounts you are talking about with a MINIMUM of $22,000/year (which can easily increase as interest grows while you’re attending school, plus increases in tuition).</p>

<p>The bottom line is that you and your family need to find a school that IS affordable. Several excellent suggestions have been made, including schools that would offer you merit aid for your 34 ACT. Do NOT proceed with VT until and unless you and your family have run the actual numbers of how much things will cost and have jobs IN HAND that will meet the loan repayments. In this economy, no matter how many people WANT jobs, there simply are not that many available and they will likely not pay as well or provide the number of hours or flexibility needed.</p>

<p>Engineering is VERY HARD. Many, many students end up with lower grades in college than they had in HS. Nearly all students intend and try to get straight As–many of those who get them in college were kids who got them in HS. Working too many hours while carrying a heavy courseload (required by engineering) is VERY, VERY tough.</p>

<p>Please, please reconsider this plan. Explore your state schools more closely, INCLUDING community colleges which may have a cooperative agreement with your state Us, saving you tons of money and still allowing you to get the same engineering degree and job. Our D started at CC & then transferred to her dream U, which saved us all a lot of money so she can attend her U debt-free.</p>

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<p>I didn’t notice if someone mentioned this before but have you considered the fact that you may need to move back home with your parents for several years after college to be able to afford your loans? Annasdad’s list of expenses shows you the bare bones of what will be coming in and going out IF you land the $60k job. Do your parents live in an area where you would be able to commute to a job nearby? </p>

<p>Life rarely goes “as planned”. The adults here know this from experience and are trying to help you avoid having large debt after school.</p>

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<p>OP, sorry to tell you this, but many kids at my S’s engineering program at a very highly ranked engineering program were having a very hard time getting ANY job in their field, even if they were willing to relocate. Many had NO job offers and decided to go to grad school to get a masters in their 5th year in the hopes that the job market would improve. Met some of them, bemoaning the fact that they are one more year in debt and still no job offers.</p>

<p>S feels very fortunate that he was offered 3 jobs and because he had NO loans or other obligations, he could choose the one that offered him the most growth and opportunity rather than one that would allow him to live at home & commute. He received very generous merit awards throughout college so he graduated debt-free. Having as little debt as possible gives EVERYONE a lot more breathing room and options – the student and his family!</p>

<p>Good luck to you in make decisions that will work for you AND your family.</p>

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<p>Adding one more opinion on not taking so many student loans: My husband works as a mortgage banker and is in a unique position to look at the finances of many young 20 and 30 and 40 year olds and sees first hand the crushing reality of student debt. Right now it looks so easy - just get the loan and pay it off later – no big dieal. But there are so many people that can barely make their day to day expenses, much less buy a house or do any of the extras they want - because of student loans. Also, don’t forget the compounding of intereste - where a $50,000 loan becomse $80,000 or $90,000 by the time you get it paid off.</p>

<p>If you start at CC then transfer, in my opinion there are more transfer scholarships available for top CC students, particularly those who are in the CC honor’s fraternity, than if you are coming from another 4 year institution. Also, I know many CC’s get a bad rap because they have many students who are not ready for a 4 year college. But most CC’s also have a track for kids who plan to go for 2 years then transfer. In our state, those credits are guaranteed to transfer and the kids in that program are very motivated to succeed and do well.</p>

<p>It may be worth a trip to your local CC to see what they have to offer before you put any more money down. You may be pleasantly suprised!</p>

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<p>OP,</p>

<p>Your have very good test scores. I believe you will do well in a CC which has been suggested by many posters. As an engineering student, you should start the 2nd year curriculum at a good college. So, transfer to NC state as a sophomore and you won’t lose anything.</p>

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<p>I didn’t notice if someone mentioned this before but have you considered the fact that you may need to move back home with your parents for several years after college to be able to afford your loans? Annasdad’s list of expenses shows you the bare bones of what will be coming in and going out IF you land the $60k job. Do your parents live in an area where you would be able to commute to a job nearby?</p>

<p>No one can count of finding an eng’g job in their hometown area 4 years into the future. </p>

<p>HIMom…tell those eng’rs to look in the Huntsville area (Cummings Research Park)…the many, many Fortune 500 and techie companies here are hiring. If they’re willing to relocate, they should look here.</p>

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<p>Most of these kids are from CA. No idea when they’re currently doing or it they’ve expanded their search nationwide. I know there is an engineering internship and career placement office on campus and assume they help the students and alums with job options. They have a lot of employers at job fairs–some years they’re hiring & some years, they’re just keeping their name in the conversation but have no budget to hire.</p>

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<p>OP,</p>

<p>Joining the chorus in saying that this is a plan for disaster. You will end up with no degree and your parents will not have a house. I do not understand for the life of me why would your parents want to borrow more a year than their annual income?</p>

<p>The net-net is that this is not a financially feasible plan for your family!!! they cannot afford this!!!</p>

<p>Your parents make 11k a year. How are they going to pay for this.</p>

<p>The one thing that you are not considering in your plan is when work these summer and part time hours you will have more income. When your mom works she will have more income. The more income that you have, the higher your efc will be, your demonstrated need will go down and the less aid you will receive.</p>

<p>While it may not be the ideal situation for your parents, you need to do one of the following:</p>

<p>go to community college in NC, so you can be in a position to transfer to NC state, NC A& T, CH or one of the other good in-state choices that you have.</p>

<p>Take a gap year, look at your and redesign your list to include schools where you stand a chance for automatic merit $$ that can hopefully being this down to an affordable cost.</p>

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<p>Don’t do this to your parents. I don’t quite understand how you did not get into NC State or any of the many other state universities in NC that would be far more affordable for you. If you should die or become disabled, or if something should happen to your parents while you are in the midst of all of this, you are going to lose their house for them. Yes, it happens. You feel immortal right now, but bad things can and do happen, and you have left no leeway, and are dependent on a lot of things to happen just right. You can do poorly in math/engineering classes, or find it is not for you. You can get overwhelmed your first year and have issues. Your field of engineering can hit a depression and no jobs materialize when you are ready to look for one. I can make a list as long as this reply box.</p>

<p>When adverse events occur to families who have the income and assets, they can work around them. You don’t have that situation. This may be your first step in helping your parents with their old age–making sure that their house remains an asset from them.</p>

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<p>Check out the fine print on the private student loans. The rates vary, some quarterly, some monthly! Does the private loan have a ceiling, interest varies but there is a maximum % cap that it will not exceed. The rates vary while you are still in school too, and the interest accrues! So in theory the loan you get today with the 6% interest by the time repayment starts, the interest can be at 15%. Read the fine print and COMPARE rates. Lenders will give you a % range on their web sites, but the actual interest rate offered you will not be disclosed until an application is almost completed.</p>