SDSU financial aid...

Paying for College
1

<p>Hey I was accepted to SDSU, class of 2015. My mom is a single parent and low income, so we don't have an abundance of money out of pocket for college. Here's what my financial aid package is looking like:</p>

<p>Federal Pell - $1500 x 2 (fall & spring)
Cal Grant A - $2442 x 2
$3000 + $7884
= $10,884 year</p>

<p>Federal Student Loan (sub) - $1749 x 2
Federal Student Loan (unsub) - $1000 x 2
Federal Direct Parent Loan - $5063 x 2</p>

<p>I'm not going to add up the amounts of the loans because it'll just make this post more confusing, and I'm trying to make this as simple and straight forward as possible. I have a few questions regarding the loans though...</p>

<p>What exactly is a Federal Student Loan? Is it a loan that I can take out in my name? Is it hard to qualify for it? I'm under the impression that I can take out this loan in my name and start paying it back when I graduate....am I wrong?</p>

<p>And is the Federal Direct Parent Loan just your basic parent loan in which my mom would take the loan out in her name? For this one, I'm assuming my mom would take this loan out and have to pay it back while I'm in school...is that how it works?</p>

<p>I'm so lost. I've never had to think about loans, interest rates, etc., so I have no idea what would be considered affordable or a "good deal". My mom makes roughly 33,000 a year working as an office manager at an elementary school.</p>

<p>SDSU says my cost of attendance would be about $23,300 a year. Minus the $10,884 I'll get in grants, that leaves about $12,106 a year I will have to pay. Is that a sufficient amount to be paid for with a loan(s)? </p>

<p>Please write back with any information you may have. I'm open to answer any questions, and I'm hoping with your help I can have some of my stress taken off my shoulders. Sorry for this post being so long :p. Any response is appreciated. Thanks</p>

2

<p>Hi there.
First, a student federal loan, subsidized, is the amount you can borrow as a student without a cosigner and pay back after you graduate. The subsidized loan means that interest does not accrue while you’re in school. The student fed loan UNSUBSIDIZED refers to additional loans that are similar, but that DO accrue interest. Together, they form the $5500 max (for freshman year) that a student is allowed to borrow via the federal government and without a cosigner.</p>

<p>After you graduate, at this rate, you would have between $22,000 and $27,000 (the amount you can borrow goes up in junior year) in debt which over 10 years at roughly 5-% would cost you between $250 to $280 a month to repay. That is about the same amount you will pay on a economical car lease, for example, or about a third of what usual “starting out rent” might cost you as you enter the working world. That is considered “reasonable” student loan debt, although it is not especially ideal. However, preparing yourself to be employable is certainly worth something – so if you consider it an investment in yourself and are fully prepared to make the financial sacrifices to pay it back, there is no cause for extreme alarm. Most students have at least this much debt.</p>

<p>More troubling to me is that the school is offering a “Federal Direct Parent Loan” of more than $10,000 a year – which will be in your mom’s name, and for which she will have to sign. I say troubling only insofar as if as a single parent without a lot of fiscal resources, she might want to carefully consider whether she will be able to manage the repayment of this loan. She will start loan payments immediately while you’re in school, and at the end she will have a $40,000 plus debt.</p>

<p>Some parents are happy to take on this kind of fiscal burden to see their children attend the school they want. Compared to the cost of “private” colleges or the ivies, a COA of $23,300 is quite competitive and approximately HALF of what it would cost to go to a different school out of state or one of the privates/LACs etc.</p>

<p>You will want to discuss with your mom what the impact of assuming such debt will be, and to discuss whether she at any time had saved cash or has sufficient cash from her earnings to instead pay the $10k each year, which would be preferable to assuming debt. The parent plus loan has a comparatively high interest rate (eg. 7% I think) but does have some options such as temporarily scaling your payments to income during tough times (but accruing lots of interest, so this isn’t really such a kindness ;)</p>

<p>One of the big problems with debt when it comes to student loans is that they CANNOT be discharged ever even during bankruptcy – your wages can be garnished, etc. etc. – you must be prepared to stay on top of them whatever happens. That is why it is much better to work lots and save during the summer.</p>

<p>Another option if you were uncomfortable with this debt level or you mom just simply isn’t in a position to contribute would be to attend a local college for the first two years and then transfer to SDSU (which I assume is in CA, right?) They have an agreement I believe that allows for transfer of credits.</p>

<p>The financial aid package you’ve received is pretty standard and is based on your mom’s income. Please do not hesitate in discussing this with her to make sure everyone is comfortable with what it means to your collective lifestyle. Best wishes!</p>

3

<p>I agree with Kmcmom with everything she written above. It comes down to whether you and your mom can come up with the $10K+ per year that this school is going to cost. The PLUS is a parent loan that is available to any/every parent, and she does have to apply and qualify for it. If you and your family can come up with the money some other way, that won’t be necessary. Or if you come up with a portion of it, it would lessen what she would have to borrow to meet the costs. </p>

<p>Honestly, at her income level, borrowing is risky and not recommended. Doubt she could get an unsecured loan for that amount on the open market. The school loans are offered to her because she can’t get out of them other than through death, pretty much. The federal govt is involved and they will go after her through tax refunds, pay garnishments and other ways that the average creditor does not have available. So she will have to repay those loans. </p>

<p>If it were just a one year loan, that’s one thing, but you are going to be facing this same issue next year, and next and next. That’s $40K in loans which comes to a payment of $600-700 a month for at least 10 years and some payments for about 14 on a standard schedule. Can she afford that on $30K a year? I don’t think so. </p>

<p>The other thing is that you will have $30K in debt, most likely upon graduation and for a middle classed kid whose parents are in good financial stead, that is doable, because of the help family can give them in a crunch. You are leaving little buffer for the things that come up in life and cost. So you will be “all loaned” up going there.</p>

<p>With tax breaks and savings from you, not being at home, your mom can probably come up with some amount of money to pay the college. If you start looking for jobs now and take multiple jobs this summer, you can get a decent stash towards your school costs too. You also should be working during the school year. But truly, you are not leaving much leeway for any extra needs that do come up.</p>

<p>In your case, commuting to a state school is the most financially responsible thing to do. It will alleviate a lot of present and future financial stress on you and your mom.</p>

4

<p>Thanks so much for your input and information. I understand it a little more. Based off what you both said, if I want to attend SDSU in the fall, it sounds like it would be in my best interest to find a job now and work through summer and school next year to help my mom pay off the $10,000+. That sounds a lot better than taking out loans and having to pay them back for 10 years.</p>

5

<p>Your mom would be expected to borrow $40k over 4 years. you won’t likely earn enough to pay for YOUR loans and HER loans. </p>

<p>That said, it looks like SDSU might not have to cost you the full COA.</p>

<p>In-state tuition and fees: $5,206 </p>

<h2>Room and board: $11,485 </h2>

<p>Direct costs…about $17k…you might find ways to bring the R&B down with a less expensive housing and meal plan choice.</p>

<p>Books and supplies: $1,638 this is a very high estimate. with careful purchasing of used books and using online sources, you can get this down below $1k </p>

<p>Estimated personal expenses: $2,657 Obviously, you can spend less here</p>

<p>Transportation expense: $1,320 Again, you can spend less here. </p>

<p>Federal Pell - $1500 x 2 (fall & spring)
Cal Grant A - $2442 x 2
$3000 + $7884 = $10,884 year</p>

<p>Federal Student Loan (sub) - $1749 x 2
Federal Student Loan (unsub) - $1000 x 2</p>

<p>With grants and loans you have about $14k in aid. cover the rest with summer and part-time job. </p>

<p>weren’t you given any work study? if not, call and ask for some. If they can’t give you any, then find an off-campus job during the school year and work 8-10 hrs per week for personal expenses and transportation.</p>

<p>Work over the summer to cover anything else not covered.</p>

<p>the below is ridiculous since your mom is low income. Bad idea!</p>

<p>Federal Direct Parent Loan - $5063 x 2</p>

6

<p>Good luck on figuring it out. My son had to turn down the acceptance offer because of the lack of any substantial financial aid. It was an entirely loan package. We just didn’t want to incur the Parent PLUS loans.</p>

7

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<p>I only see $3000 + $4884 = $7,884 in grants that you listed. Is the math incorrect or did you leave out another grant?</p>

8

<p>Everett805 -</p>

<p>If you spend some time at [FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org) you will find useful information about the different kinds of loans, as well as all types of financial aid. That website includes a number of useful calculators that you can use to help evaluate which loans are not going to work for you. I really like their calculator that compares different aid packages: [FinAid</a> | Calculators | Award Letter Comparison Tool](<a href=“Your Guide for College Financial Aid - Finaid”>Award Letter Requirements - Finaid) You should use it to evaluate the one that you received from SDSU.</p>

<p>Wishing you all the best!</p>

9

<p>Good catch dad. Either missing grant, work study , or math mistake. </p>

<p>That said the csu schls have ridic r and b costs. I wonder if this student applied to a csu he can commute to. Low income cal kids need 2 apply 2 a nearby csu for a safety.</p>

10

<p>I have a question(s) to the OP or anybody who knows. Howcome you recieved a cal grant already? Aren’t they supposed to be renewed by June? and once they are renewed then you’re supposed to post the school change, in this case Sdsu? The way the school you plan to attend finds out about your cal grant is through fafsa no? Before anything though, I believe it’s different for someone who just applied for a Cal Grant so if that’s your case then okay but if not or if anyone knows the answer to my question, can you pleeeease help me? because I just got my award from Sdsu without the cal grant showing up.</p>

11

<p>Incoming freshmen at UCs and CSUs have been getting Cal Grants listed in their FA pkgs. If you don’t have one, call the FA office and find out why.</p>