Shippensburg and University of Pitt Engineering Programs

Parents Forum
241

OP- it’s your money and you get to spend it.

But review the terms of a HELOC or private loan VERY carefully. I know a lot of people who are retiring this year (or who had hoped to retire within the next few years) who suddenly realized that the “no brainer” use of their house to finance college is going to keep them working into their 70’s.

All those nice retirement worksheets you can download? Most assume no mortgage and just your property taxes, utilities, etc. for ongoing housing costs. That fat book you got from HR with your benefit pacakge 10 years ago? Same assumption. The online estimator you did last year which showed how “easy” it is to move from Pennsylvania to Florida? That assumes that you own your home free and clear and therefore, selling in a high priced state to live in a low priced state yields enough extra cash to finance your move and buy a car once you get there.

Using a HELOC is very tempting but unless you are really young to have college aged kids (and two more decades in the workplace) or have a rich uncle who is leaving you his fortune when he dies (he should live to a ripe old age of course) it really complicates retirement planning.

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@Collegefrazzled Anything above the guaranteed student loan you have to co-sign. My husband and I decided we won’t do that - too risky (5 kids).

We pay the remainder (painfully) out of pocket – our net each kid is about $14K a year. And we make them live in the cheap dorms!!

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@Collegefrazzled Does that $8500 from Pitt include the federal student loans?

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@laralei I made a mistype. It’s $5,500 a year for the scholarship. Total $22,000
I know paying off a Parent Plus loan with a HELOC is not paying off the loan but the rates are much less. I don’t have money to pay the tuition so I will help my son by taking out loans or co-signong. Trying to figure out the best options. He may have 3 co-ops at Pitt Johnstown so hopefully that can help with tuition costs. Still waiting to see if Ship offers any additional scholarships
@sevmom Penn State is expensive and very rarely gives scholarship money. Tuition would be 18,500. Thinking $5,000 a year. I have $3,000 in a PA 529 account. Not sure when I should use this money or even how

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Sorry if I missed this- is your son your only child or do you have other children you also need to use your funds for?

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Ship is $23,000 for tuition, fees, r&b, and at this time the only aid is a $2,000 merit scholarship. So money to come up with there is $21,000.

At UPJ the tuition, fees and room and board is $24,000.
With $5,500 merit the remaining cost would be $18,500.

Son can borrow $5,500 to $7,500 in the next 4 years.

You can contribute possibly $5,000

And son can work in the summer to earn $3,000.

So that is about $13,500 for the first year.

So you would need to borrow about $5,000 a year.

If you qualify for AOTC of $2,500 then that might help too.

https://www.irs.gov/credits-deductions/individuals/aotc

Parent Plus has pretty high interest and origination fee. If you have some home equity to draw on, maybe get a HELOC, pay the $5,000 out of that and then partially pay it back with the AOTC, once taxes are done.

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@sevmom, I also suggested PSU Behrend before I found out that UPJ had engineering.
It is the same distance of 5-6 hrs as Youngstown and cost is similar to UPJ but merit possibility there is unknown.

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Yes, I thought maybe there might also be a closer Penn State branch than Behrend that has engineering? But I haven’t looked.

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Here are the costs for UPJ
http://www.upj.pitt.edu/en/admissions/costs/

So tuition and fees for engineering would be about $7,000 a semester or $14,000 a year.

A double room about $3,000 a semester or $6,000 a year

And unlimited access dining about $4,500 a year, but the 200 dining passes (divided by 15 weeks per semester) plan would provide about 13 meals a week plus dining dollars to be used at other food places on campus. That one runs about $2,000 a semester or $4,000 a year.

So about $24,000 to $24,500 a year depending on meal plan choice.

Books for engineering might be pricy but can maybe be rented for less or bought from upperclassmen .

250

For the $2,500 AOTC you can claim up to $4,000 of qualified education expenses (tuition, qualified fees, books) that were not paid with scholarship money or 529 money.

If tuition and fees and books is $14,000 (health fee might not be qualified fee), and tax free scholarship is $5,500 then there is $8,500 of qualified education expenses left.

$4,000 of that can be claimed for AOTC and $3,000 can be paid to the school from the 529.

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@sevmom I have 2 sons. My oldest graduated from college and I have a HELOC for him. He plans on paying toward it. I know students who go to Penn State and don’t get any merit scholarships.

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Are you offering your youngest the same types of options/financial support your oldest was given? If not, that is where it could tricky.

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@Collegefrazzled It does sound like Pitt Johnstown is a good opportunity, though you would still need private loans.

It is good you have a few options. If he likes the UPJ campus, a Pitt engineering degree is probably better than Ship’s, since you would need loans there as well.

@sevmom The first kid through is often the test case; you learn a lot the first time around and hopefully learn from the experience.

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@sevmom @laralei I think Pitt Johnstown will be a better option unless Ship offers more scholarships and makes it cheaper than Pitt
My oldest went to the community college and West Chester. His choices, but he said if he had to do it over again he would have gone to West Chester for 4 years. He didn’t have enough time to spend with the friends that he made and to fully enjoy the college life. They also didn’t accept all of his credits when he transferred so he had to take similar courses that he took at the CC. I will finance them equally. My youngest will have bigger loans because this is his choice

Any advice where and what private student loans to get? Do you think this is a better option than Parent Plus? I wish Federal would allow my son to borrow more

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If the Federal Government allowed your son to borrow more, you’ll be posting here 6 years from now about how he is barely keeping his head above water with the loan payments he’s making.

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Is your older son working now? Is he paying back student loans too?
Can he give you money monthly to help pay on the HELOC?

For UPJ you would need to borrow about $5,000 if you can pay $5,000 from savings and son takes his $5,500 loan and earns $3,000 in the summer. If you use the $3,000 in the 529 the first year, then you might only have to borrow $2,000 (which you might be able to get from the HELOC, esp. if older son helps pay it down).

Then in February 2019 when you file your taxes, if you get a tax refund because of the AOTC and dependent credit, you can maybe use that money to pay off what you borrowed).

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@mommdc Thank you. Unfortunately my oldest son was laid off but he is still able to pay his own student loan. Do you think it’s best to use the $3,000 the first year? It’s for credits Hoping my son could get a job this summer to help pay for the tuition. I have to determine the best option to borrow money, Parent Plus, private loans or HELOC.

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I think I would use the 529 money the first year, to reduce the amount you need to borrow that year. So less money will be accruing interest.

Hopefully next year your older son will have a new good paying job, and might be able to help you pay on the Heloc.

And maybe your younger son can work this summer and next, and get some co-ops in junior and senior year.

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Ok, so let’s say the yearly cost for tuiton, fees, room and board the first year is $24,000.
He gets a $5,500 scholarship from UPJ, and he can take out his $5,500 student loan.
So then there is $13,000 a year left to pay.

The school will bill by semester. And award half of yearly aid per semester.
So maybe in July you will get a bill for $6,500. ($12,000 minus $2,750 fall scholarship and $2,750 fall student loan).

So then you can decide how to pay that (bill might not be due until Aug or Sep).
Maybe $2,500 from your savings, $1,000 from son’s summer job, $3,000 from 529.

Then you wouldn’t have to borrow anything yet.

Son can have some of his summer earnings to buy books, and for spending money.

Then when November comes, you might get the spring semester bill (due in December or Jan).
Another $6,500.
You can contribute what you can from savings, son can give you some more of his savings, and you can borrow the rest with a Parent Plus loan.
If you think you can qualify for the AOTC, then you could file your taxes asap in 2019, and apply your tax refund towards the loan.

It might be wise for your (younger) son to find a job soon, if he doesn’t have one yet. He can maybe start working on weekends, and then hopefully be set for a summer job too.

He can also try to apply to some local scholarships. The high school guidance office usually keeps a list.
They might be small, non-renewable amounts, but they can help with books and school supplies.

You can contact the PA 529 office and find out how you can utilize the $3,000 balance. If UPJ engineering has a GSP credit rate of about $600, then maybe the $3,000 will pay for 5 credits in the fall semester of freshman year?
I am not sure how it works.

https://pa529.com/pdf/2017-18-Rate-Card-with-Premiums.pdf

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Adding to what @mommdc said above - we also use the payment plans the school usually offers to further break down each semseter into a few payments - it really does help.