<p>The COA is 14,050, that includes tuition, fees, housing, and meal plan. Doesn't include books or any other small expenses such as parking pass, but I believe I can pay for those out of pocket. </p>
<p>What will be the monthly interest payments on the 2000 unsubsidized amount? Or will it even be handled monthly? We do have some assets, but they're not specifically set aside for school. More like it's assets we're having to spend on everything. Paying 2000 upfront would be difficult but paying interest for 4-5 years could get old fast. Not to mention we'll be dipping into those assets for things like a laptop, books, clothes, etc. But overall, did I receive a good financial aid package?</p>
<p>Your package looks pretty good. You don’t have much of a gap, and after four years your debt load will be in the average range for most FA students attending in-state universities on-campus. The unsubsidized Stafford loan’s interest rate for the year of 2010- is 6.8%. The unsubsidized Stafford loan will begin accruing interest while you are in college but you don’t have to start paying it (you won’t receive a bill) until after you graduate from college.</p>
<p>Will interest have to be paid monthly? Or is it quarterly or yearly? And do you know what the interest payment on a 2000 dollar amount would be. It may sound stupid but i cant find a loan calculator that will tell me that, only how much a payment on the entire amount would be.</p>
<p>I don’t see much of a reason with the above financial aid award to take the unsubsidized Stafford. COA = $14,050 – and the grants and subsidized loan total $12,400 – leaving a $1650 gap. Divided by half (per semester), that means that without taking the unsubsidized loan, you will have to come up with $825 to pay for your fall semester fees. Can’t you get a job and earn that over the summer? And then get a part time job during the year? That really isn’t a huge amount of money.</p>
<p>Keep in mind that you are NOT giving up the ability to get the unsubsidized Stafford if you turn it down now – if you find that you can’t make ends meet during the course of the school year, you can always apply for that money later on.</p>
<p>One thing I should add is that 1500 dollars of the 5500 I’m receiving from the state depends on our income being below a certain level. And we’re only below that level by 775 dollars. What I’m not sure about is if the state would only look at my parents adjusted gross income as long as I’m dependent, or if they would add any taxable income I make to that figure. I know a certain amount of income I make is protected on the FAFSA, but that’s only for EFC that effects my federal aid. Any and all money I make will be considered taxable income, and if my state looks at that then I will need to make at least 1500 this year to make up for what I lose next year. </p>
<p>I indicated on my FAFSA that I would be interested in work study, my school didn’t offer it. It could be because they considered my financial aid package complete with the maximum Stafford. My biggest problem with having any kind of job during the school year will be my heavy course load. Ill be taking a lot of math and science for engineering.</p>
<p>And what do you mean about getting the 2000 unsubsidized later on? Do you mean at the beginning of the next semester? Or in the middle of the first semester?</p>
<p>You can request the loan at any time during the school year. You can also request the loan in any amount up to $2000 – so, for example, you could opt to borrow $1,000 rather than $2K.</p>
<p>It makes no sense whatsoever economically to avoid work in order to meet some sort of income level to qualify for added support. That’s basically a welfare mentality and you will never get ahead thinking that way. Your earning capacity will go up in future years --so if you earn, say, $2500 over the summer, you will have more money for the coming year. You might lose $1500 in grant money in the school year for 2011-2012 – but perhaps you could earn $4000 in the summer of 2011. (That’s how much money my d. earned the summer after sophomore year --and she was a liberal arts major). </p>
<p>You are not doing yourself any favors setting yourself up for increased debt over the long term. </p>
<p>You might still talk with your college financial aid department to see whether you could be given work study in lieu of the unsubsidized loan. </p>
<p>Also, I don’t want to be mean … but if you plan to study engineering, why couldn’t you figure out the formula for calculating simple interest that I gave in post #4? Don’t engineers understand basic math? I thought that formula was something taught in the 6th grade. (I’m not trying to pick on you - I once ragged on my daughter because she couldn’t remember how to divide fractions when she was in college – its a pet peeve of mine that students are race through higher math in high school to BC Calculus and beyond, when so many don’t seem to get basic, practical applications. Too much calculator math and not enough on basic concepts and figure-it-out-yourself math. I wish people would master the basics first. )</p>
<p>Calmom, I understood the equation, I was just wanting some clarification I guess. I also wasn’t sure if the 6.8% was a yearly thing or not, I just don’t have any experience with loans. And if it makes you feel better, I took this information and made a spreadsheet showing interest to be paid on 8000 dollars worth of unsub loans if I took out 2k each year to show to my parents. Came out to 1360. Just doesn’t seem worth it for what consists of such a small portion of my financial need. Ive been looking at this like it’s a 2,000 dollar shortfall I’ll have come August, not 1,000 a semester (Or even less depending on how the COA really breaks down, I’m leaving some wiggle room just in case). </p>
<p>Also, I DO want to work. I guess it sounds silly to worry about losing 1500 dollars over a year from now when I have two summers and semesters between now and then. Like I said I’ll contact my schools financial aid office tomorrow about work study, being a large state university my chances are probably slim but it’s worth a shot. I showed interest in work study not only because of the money but also because I think an on-campus job could be a great experience.</p>
<p>I just get frustrated sometimes reading these boards at students who seem so willing to take on debt without considering the real consequences. So I am very glad to know that you’ve made a spread sheet and looked at the specific consequence in terms of dollars. </p>
<p>There are times that you have no choice but to borrow, but I personally don’t like the idea of unsubsidized Stafford loans to students who can’t afford to be making loan payments. Sometimes the loan aspect of the financial aid system looks to me like a way of making life harder - not easier – for the neediest students. Yes, it enables you to get an education in the short run – but I know people in their 40s who still haven’t paid off their undergraduate debt.</p>
<p>I am not talking so much about the numbers you cited as much as other students who post here thinking they are going to borrow $20K per year for college. </p>
<p>But the bottom line still is that its best to minimize borrowing as much as possible. </p>
<p>I would note that my daughter has made a lot of spending money at college doing things that are not reportable income. I mean things like earning extra from odd jobs for various people - during her freshman year she even had other students pay her to clean up their dorm rooms. She also always sells back her text books, and figures out other ways to economize. So basically you could pick up extra cash over the summer babysitting or walking dogs or mowing lawns – whatever neighbors will pay you to do.</p>
<p>I was glad to read about the unsub stafford loan part. My question, if someone can answer is probably simple, but I since my head is spinning over this stuff, I hope it doesn’t sound dumb.</p>
<p>My daughter is getting a 3/4 scholarship from the local state school she is going to. The state program will most likely be paying the rest (she qualifies). No real out of pocket that we can’t handle (yay). However, she will want to take a class in the summer (2011) and while it may not seem like a lot to some (about $500 or so) It would be so much less strain on us and her if she just borrows (MAYBE !!!) (unsub Stafford) the 1,000 or maybe a little less (can you?) so she has it. She / we have other expenses and this will just be easier. If we need this for summer, when , during the 2010-2011 school year can she borrow this / should she borrow this. Can she wait till beginning of 2011 to use it in ? April/May?</p>
<p>I hope this makes sense because we don’t need it right now, but will need it early 2011. (maybe !!) She may not need to do this is she gets a little extra scholarship money we don’t know about yet…so this is a “what if” .</p>
<p>Loony, I don’t know the answer to your question but the element that I left out of my equation (calculating simple interest for one month) was time – as well as the element of cumulating interest. </p>
<p>A low interest rate paid over a long time will cost more than a high interest rate paid over a short time.</p>
<p>So if you borrowed $500 with an unsubsidized Stafford – which is has deferred payment until graduation but is running interest all along – over the life of that loan you would pay more money in interest than if you put the same amount on a credit card charging 15.9% interest and paid it off over 24 months (monthly payments of about $25). </p>
<p>Now obviously someone who is disciplined can take advantage of the lower interest on the unsubsidized Stafford and pay it off on an accelerated schedule – and of course they will come out ahead.</p>
<p>But most people don’t operate that way. It will be out of site and out of mind – and if your d. borrows $1000 because it just makes everything a little easier (even though you don’t absolutely need it)… then by the time the first payments come due 6 months after she graduates, she’ll owe $1250. (and of course if she borrows again next year with an unsubsidized loan, that too will accrue interest). She won’t think about it because there is no bill coming-- and maybe she’ll go on to graduate school for another 2 or 3 years, and the payments will continue to be deferred. </p>
<p>At least if the money was charged to a high interest credit card, there would be a monthly bill as a reminder. Some people might make the mistake of paying only the minimum due on the card – which is why credit card debt is also bad – but my point is that under the scenario you described, your daughter is paying a lot more than $500 for that summer class.</p>
<p>An interest bearing loan is NOT free money – it is very expensive money. A subsidized loan is a pretty good deal, because <em>somebody else</em> (the government) is paying the interest. Obviously, any time you can get <em>somebody else</em> to pay stuff for you, its a good deal, whether the <em>stuff</em> is a grant, a scholarship, or 4 years worth of accruing interest.</p>
<p>For unsubsidized loans – its not such a good deal. IF you have to take them, then at least have the good sense to pay them off on a self-imposed accelerated schedule. But consider whether there are better alternative options. Again – a low rate of interest where payments are deferred can end up costing a lot more than a higher rate of interest where payments begin immediately.</p>