<p>My daughter is going to need to borrow money to attend college. After the Stafford loans, she needs about $15,000 for this coming year. We don't want to take on more debt of our own, and we don't have enough disposable income to pay this ourselves; it's up to her. Where can we find comparative information about private student loans? Like, what are the top lending institutions to consider, and how to compare the terms of loans she applies for?</p>
<p>Just to keep the thread on track, there are complicated reasons why she needs to attend this particular school and why she needs to borrow this money, as opposed to working and saving up, or having us try to pay it or borrow for it. I'd just like to know how to go about making a good choice between private loans. </p>
<p>Oh my…I know that you want to stay “on topic” but helping her borrow $60k in private loans as well as the fed loans (about $27k), is like helping your child ruin her life. </p>
<p>How much will she be earning upon graduation do you think?</p>
<p>Do you realize how HIGH her monthly loan payments will be and it’s very likely she won’t be able to pay them…and then the lenders will look to you (necessary co-signer).</p>
<p>If you can’t co-sign, then this is a non-issue.</p>
<p>As Mom2 says, the terms of the loans your daughter will receive will be based on your credit rating as the cosigner of the loans. </p>
<p>
As cosigner, you are effectively taking on the debt as it will show up as your debt on your credit score as well as on your daughter’s. You need to be sure that you do have enough disposable income to pay the debt if it comes down to it. The lenders will go after you and your assets in the event that your daughter misses payments or is unable to pay for whatever reason.</p>
<p>I don’t know that there is any way to compare loans other than by comparing interest rate (that would be a prime consideration), any origination fees, any benefits for on time payments etc. If it were me taking out a loan of this magnitude, I would probably do a spread sheet to compare the terms of the loans and the ultimate cost of each loan.</p>
<p>Will she need $15,000 each year or just for this year. I also think she’ll need a co-signer but I’m wondering if it’s just $15,000 or it’s $60,000? if it’s $60,000 plus her federal direct loans she’ll be closer to $100,000 and she would be very high risk for default coming out of college which could impact your credit score if you don’t pick up the payments and are the co-signer. Have you looked at the parent PLUS loans? Regardless look for the college student loans and look at the repayment terms carefully to see how the repayment will be structured.</p>
<p>Because your daughter does not have credit history or adequate income, she will need a co-signer - you - to take private loans. Being a co-signer is taking on a loan yourself - according to how lenders view it - regardless of the private agreement you are going to make with your daughter. In light of this, given your reluctance to take loans yourself, I am afraid your daughter will need to find more affordable school.</p>
<p>There is no more affordable school with an illustration major that I could find in 2 years of research. This is in-state tuition at a state school. Tuition and fees are $13,000 a year, and room and board is $7400. We are planning to pay for food and expect her to work to pay her other expenses. We can take on the debt as a co-signer, and we could pay if we have to, but we also want to make it clear to her, regardless of what the bank says, that we expect this to be her debt to pay back. Parent PLUS may be what we should do, though. I am going to try to help her find additional aid for next year; I hope it won’t be $15,000 each year. </p>
<p>I think I need a financial advisor to sit down with us. It has taken so long to even find a school that fall is upon us and we don’t really have enough information.</p>
<p>Your D could start at a local CC and save 2 years of costs and loans.</p>
<p>I highly doubt that a financial advisor is going to be able to figure out a way to get a state school to give you more money. State schools often only have federal grants to hand out to low income students. And aid your D “might” get in later years would probably be dependent on her art achievements, not from something a financial advisor could identify.</p>
<p>If you have the income to qualify to co-sign loans, then your EFC is likely too high for any financial advisor to make a difference.</p>
<p>You may be able to convince your D at this point that this is “her debt,” but she has no idea of what she’ll be earning (or NOT earning) 4 years from now. She’s 18 years old and will naturally assume that she’ll be a great success. In the end, she may only earn enough to pay for the roof over her head as a freshly minted art graduate. She won’t be able to squeeze loan payments from turnips. </p>
<p>Seriously, how much do you think your D will be earning as an illustration new grad? Do you really think she’ll be able to make $600+ a month loan payments (plus Stafford loan payments)?? really???</p>
<p>As to “hoping that it won’t be $15k every year”…unless she starts at a CC, you need to expect that it will be AT LEAST $15k per year. Costs go up every year, and there isn’t much “new aid” for continuing students. </p>
<p>If she started at a CC, she could get her Gen Ed credits done, and many CCs have pretty good art depts.</p>
<p>Atlartmom, I was just reading about what it takes to become an illustrator, and not a single person mentioned college, much less debt for college. One did say you can find great art at CC, so work and study to develop your knowledge and skills as an artist. Illustration takes more attention to detail because the art will be reproduced, so it takes understanding the printing process too. It really sounds like people come into the career in many, many ways. Maybe your D should consider working at a part-time job, taking a class or two at a CC, and devoting strict time to working on her art skills. Maybe seek to interview illustrators through a publisher or magazine. One mentioned instead of targeting galleries, target a particular market with your art…I think your D should avoid debt considering the career she would like. Or, choose a college where she can get into graphic art, advertising, etc, and then pursue illustration work on the side while working in an artistic field. She can take a gap year, and apply to a wider variety of schools that may have more money to offer her, making the cost less. If she does this, don’t allow her to earn any college credits this year, or she will lose freshman status and be considered a transfer. Transfers don’t get the great money offers freshman do.</p>
<p>“we also want to make it clear to her, regardless of what the bank says, that we expect this to be her debt to pay back.” is your quote. </p>
<p>Regardless of what YOU expect, when you cosign, it is your loan as well as your daughter’s. It goes on YOUR credit report as an outstanding loan, and every payment and non payment gets noted on YOUR credit report as well as your daughters. If any of the three D’s–death,disability, dropout, occurs to your daughter, it is likely that it becomes YOUR problem because YOU are equally responsible for those loans. </p>
<p>An advantage of PLUS is that if either you or your daughter dies, the loan is forgiven. Your DD won’t have that loan on her report for when she tries to get started in life with other loans that she may need, and credit reports that she may have to undergo for jobs. Unless you can get a great interest rate on an cosigned loans and some insurance component so you won’t get saddled with it if your daughter should pass away, PLUS is a better deal. More flexible options if you need them. </p>
<p>But make no mistake, when YOU borrow the money, YOU are the one responsible for repaying and will take the hit on your credit record if payments are not made. And you are putting an awful lot on a young adult with no credit, no income, no real assurance of having enough money in the future to pay back those loans. The banks and other lending institutions are savvy about this sort of thing and know well what the chances of getting payback from students like DD are. You are saying you know this girl personally and trust that she will beat the odds and be able to make the payments. We’ll see who knows better when the payments become due.</p>
<p>My dear friend and her DD are on the hook for $90K in loans, and the young woman is working 830 hours a week at a coffee shop. She doesn’t make enough to make the loan payments,and it has hurt my friend terribly. She lost out on a loan and a contract due to this hanging around on her credit report and she is trying to pay some of this back as she is watching in horror how interest works. They will be in 6 figures of loans in a short time if they don’t make a dent in the principal. </p>
<p>I won’t even go into the “must go” a certain track to be an illustrator, other than to say that I disagree with you. There are many paths to most every occupation. I think it would be a very smart decision for her to find a more affordable one. THe odds are against her making the kind of money to be able to repay those loans and live independently.</p>
<p>*Regardless of what YOU expect, when you cosign, it is your loan as well as your daughter’s. It goes on YOUR credit report as an outstanding loan, and every payment and non payment gets noted on YOUR credit report as well as your daughters. If any of the three D’s–death,disability, dropout, occurs to your daughter, it is likely that it becomes YOUR problem because YOU are equally responsible for those loans. *</p>
<p>Cpt is right. And even if any of the “three Ds” (hopefully) doesn’t occur, it is VERY likely that a new illustration grad will NOT be earning enough to pay back these loans. </p>
<p>The “hope” that your D will get better financial aid in future years so that she won’t have to borrow as much isn’t likely going to happen. Schools give the BEST aid to incoming frosh. Schools don’t have much incentive to improve aid for later years.</p>
<p>I can’t see any reason why your D can’t start at a local CC to get the Gen Ed and basic req’d Art classes that art majors all have to take their first two years. At least that would save at least $30k in loans.</p>
<p>You seem to think it is so all fired important that she live at a university to get that specialty education that I , and others here, don’t see as so essential for her to get for her desired career path.</p>
<p>Well, what about when she gets out? Do the numbers and figure out what you and she will owe for those years at college. and what it translates to a monthly payment. You think she can then move back home, live with you and find a job in that field? The expenses just get higher when your students enter the job market. Unless you live somewhere with a plentiful source of jobs in your DD"s field, she will need to find a job elsewhere and that is going to be very expensive. The needs just keep accelerating. A lot of kids come rolling right back home, job market or not, around parent’s home, because they can’t borrow anymore to live away from home, and can’t find a job to support themeselves, never mind what they owe in loans for the away home experience while in college. And as one mom who has gone through this, it is hell to have a 22 year old back home after 4 years of living in Sin City College (and, yes, just about all of them are that way, don’t fool yourself), who can’t find a job to support himself and still has expectations of support. Better they earn their way out. Though you can come home again, it is often painful for all involved. Especially when driven purely by finances and lack of a job. Throw in those loan payments coming due, and man, the tension can get bad. You think it’s tough saying , no to sleep away college? Ha! Wait till that ride ends. Wait till YOU truly have to pay out of current income and assets to support an adult child trying to get on her feet. It really is not as big of a deal now to live at home and commute to school. Trust me on this one. I’ve got 5 of them spanning 15 years and have seen how this cycle plays out.</p>
<p>Since it is in-state school, can your daughter commute? It will save her around 7K a year?</p>
<p>From the info in another thread, it appears that the student is going OOS, but will be charged instate rates because of the Academic Common Market. Her home state, GA, doesn’t have an Illustration Major, so she qualifies for instate rates in another state’s school. So, she can’t commute.</p>
<p>However, what I find odd is that the mom says that they searched for 2 years for a school, yet it doesn’t seem like they also considered the economical route of starting at a CC first. When I’ve seen the Art major reqts, all art majors attending regular colleges seem to have to take a number of “common art classes” and Gen Ed classes for the first 2 years…including some drawing, painting, art history, etc classes. Those don’t have to be taken at a school with a BFA/BA in Illustration.</p>
<p>My honest opinion on the subject of art profession success is that often times you just need to be in the right place at the right time (assuming you have talent). A student can graduate from the most prestigious program ever, but still unable to find a job. A degree in this profession does not guarantee one a job, nor do you have to have an exact degree to get one. </p>
<p>What I find puzzling is that after all these stories of students struggling with their debt came out, a parent would advise their child to get into this much debt (for any degree). When I read the student debt stories, the common theme there is that a student was young and did not know any better. I would assume that a parent is capable to run the numbers through loan calculator to see how the payment is going to be and steer their child away from this mistake.</p>
<p>People really don’t get it. It’s considered the thing to do, borrow the money and go to college, Great investment. So they do it. They don’t get that the amounts are staggering as are the time periods and if you don’t start paying on that loan right away, it is accruing interest faster than Pacman munching up the little gobs. THey don’t get that it’s not like cosigning for a car, which is something that is palatable and familiar. But you start paying for the car right away, a kid usually gets an inexpensive car so the amounts are not crazy and the period is that long. A problem with these loans is that you can sign and forget about them for 4-5 years.and then …bang, you are hit with tens of thousands of dollars in loan, a big fat monthly amount to pay and the interest at the 7% rate. Doubles in no time if you aren’t paying on it. Very scary.</p>
<p>And kids don’t tend to get the type of jobs that can pay those loans most of the time. THey have job related needs even if they are lucky enough to find a job. My son’s friend got a job offer in NYC. Before he gets his first paycheck, he needs to come up with three months worth of rent, clothes, stuff, transportation costs. He’s got a “dream” job offer and his family is broke, can’t afford to stake them. And he’ll be getting the loan repayment package soon. This one is a frigging success story and it’s not workable without outside help. If he goes home to mom and dad in Smalltown, there are no such jobs. You think the needs stop and money just flows in like a river of manna when college is over and the kid even gets a job? The need machine still keeps on working.</p>
<p>I just asked my roommate, a BFA in studio art major, what she thought about taking out around $80k in loans to get a degree in illustration. She looked at me like I had two heads.</p>
<p>Taking out that much debt for any major is a terrible idea. It’s even worse for an art major where a degree is most definitely not always necessary. You should be discouraging your D from taking on crippling debt. That’s what parents are supposed to do- guide their children away from terrible decisions.</p>