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<p>Perhaps then you should stay in the UK for your schooling, borrow it all, and pay it back whenever?</p>
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<p>Because the government isn’t willing to subsidize higher education to that extent …</p>
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<p>… probably for just that reason.</p>
<p>* I’m intending to study medicine in the US*</p>
<p>Good luck with that. American med schools rarely accept internationals because the purpose of our med schools is to educate American doctors. Many SOMs refuse to accept ANY int’ls. The ones that will accept a few int’ls are very picky about who’ll they’ll accept…typically you’ll need a significant hook and/or be a PhD/MD student…and generally you have to show that you have funding for all four years. Will Britain loan you $250k all at one time? I find that hard to believe.</p>
<p>I’m a US citizen, so it isn’t such a problem to get into med schools, however I have decided only to apply for schools in the UK, for cost reasons. Luckily I have this option, but I’m wondering what I would have done if I lived in the US and was in the same situation, it just seems like a strange system of payment to have.</p>
<p>And no, we can’t get loans as high as $250K, but we don’t need to as fees are capped at £9000 a year, but that’s something completely different and this isn’t the place for me to rant about it.</p>
<p>Well if you go to undergrad in UK, then it’s a good idea to go to med school there as well. US SOMs don’t like to accept students who didn’t go to undergrad in the US. At a minimum, usually the premed prereqs have to be taken here.</p>
<p>My friend is looking at schools in Britain for her son, and the costs are no big savings over there. Are there loans available for foreign students there? What loans are available for the undergrads there?</p>
<p>For medical school, it’s a whole other story. THere are loans available to students. There was a time undergrads were able to borrow a larger proportion of college costs,but the payback rates were unacceptable. As you mention for England, that seems to be what is happening there.</p>
<p>I think the amount and reason for the private loan are more important considerations than a blanket rule. </p>
<p>Students who post on CC that they plan to finance the bulk of their education with private loans, and whose parents have low incomes or won’t contribute, are wisely told to consider other options. </p>
<p>On the other hand, S1 has a small private loan from his first year that we cosigned because the rate was much better than Parent PLUS, with no origination fee (yes, I know the rate can go up). It was a one-time thing due to some cash flow issues right when tuition was due, and it made sense for us. He also has Staffords so we intend to pay off the loan for him, and it’s small enough and we’re financially stable enough that we can. </p>
<p>We also have a home equity line in place (though we haven’t used it yet), but again, this is a financial strategy meant only for a small portion of costs, and obviously not suitable for everyone. Yet I know of families who’ve put entire tuitions and costs on home equity (and this is a high housing cost area, so I’m talking hundreds of thousands once all the kids are through, with little left). Others do that with 401(k)s. I think both of those strategies are nuts. I wouldn’t put an entire tuition on Parent PLUS, either–but that’s the bulk of our “financial aid” packages. Our little loan is small potatoes compared to that offer.</p>
<p>Because the magnitude of the financial disaster that can occur when things don’t work out as planned, and a private loan was taken out, is why I don’t like them. Both parties get hit with the loan on the credit report.</p>
<p>My friend who cosigned the loans with her daughter had all the right reason. She did not consider PLUS because she truly believed that cosigning was a better way to go than to take the loan out entirely in her name. She also equated it with the familiar undertaking of cosigning for a car loan. Her DD was majoring in engineering, was always a good student, and they were told that female engineers were “golden”. She lasted one year in the engineering program, and switched to pre dental, again something that has good paying jobs fairly readily available. She had started out as a chemical engineering major, so she already had the chem and physics. I have no idea how long she kept those plans on the table, but she graduate as a Philosophy major, took an extra summer and semester to get that degree, went a broad for a term, and had a very full, fun college experience except that her grades were mediocre. She and her mother owe over $90K in loans with no prospects of paying on them. The debt has a chokehold on both of them.</p>
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<p>This depends on whether your kid is likely to receive merit aid or not. Personally, I screwed myself by going to CC first. I was valedictorian of my class, lots of clubs and leadership positions. Considering I was not interested in Ivy league and many schools in my area give full tuition scholarships to val’s… <em>sigh</em> I did not know any of this at that age and received no feedback from my school counselor. My parents and most of my family did not attend college, so the only option I was allowed was CC to “save money.” Transfer aid is usually nowhere near as good as first-year aid when you are in that kind of situation. Oh well.</p>
<p>As for the question of this thread…it depends. My mom co-signed quite a heap of private loans for me. But she also knew I would NEVER let myself get into a position where I defaulted and left her with the costs. Even if I had to work 3 jobs to make a go…I’d make a go of it. Some parents hope their kids will do well in a “promising” major, and then they don’t. Or they graduate and sit at home on the couch doing nothing. So it really takes a whole lot of faith in your child’s abilities and motivation to make the decision to co-sign anything.</p>
<p>Also, all of my private loans take my co-signer (mother) off after 24 months. That was the best deal I saw (and was the one thing my mom was concerned with) when looking at providers, aside from interest rates, of course.</p>
<p>Please be aware that the “deal” that works for another family may not reflect your values or your realities or current events. This is one of those times when the devil is truly in the details. </p>
<p>As a parent, I’d go further for a computer science or nursing degree than for a General Studies degree. I’d also try to be shrewd about the maturity of the student. </p>
<p>It can work well to “Front load” expenses – instead of saying “We have $20,000 set aside for your education, so that’s $5K a year for four years” go ahead and pay full freight the first year because a) the student can start off strong without squeezing in a job and b) spending down assets may make for a better Financial Aid application and c) Congress may (or may not) make things easier for students over the next year or so (there certainly is some pressure for them to do so). </p>
<p>I ditto the earlier poster who mentioned term life insurance. It is horrible to think of loosing a child – but loosing a child and being on tap for $100K in his/her loans would be even more horrible. </p>
<p>You really have to do some work to think thorough the student’s plans, your value set and the details of your situation. Good for you for starting the process – I hate it when we see parents posting here who are in denial of how hard it is for students these days. We get some who refuse to fill out the FAFSA or contribute because they hold the (convenient for them) belief that a kid should be able to pay the whole ticket the way Grandpa did in 1948.</p>
<p>Never co-sign for anything you aren’t prepared to pay for yourself.</p>
<p>Not saying your child would not pay his loans, but things happen in life. </p>
<p>If you think it’s a good deal for him to take out these loans for his education, and are prepared if you must pay, it’s worth it. Like some one suggested, a life insurance policy for the amount wouldn’t be a bad idea, but most co-signers that end up paying for others loans aren’t because of a death, so just be prepared.</p>
<p>@annasdad - As someone who will be sending my son to college this fall who has unpaid student loans, I don’t appreciate the snide comment.</p>
<p>It is not uncommon for women to have children when they are 18-20 and even in this country, the term on student loans could still have an outstanding balance by the time their children head off to college. But no where in that post did it say that the woman attended college immediately after high school. It could be that she returned to school once her children were in elementary school or older to provide a better life for herself and her family. If she had to take loans to do so, those loans would not be paid by the time her children headed off to college.</p>
<p>You can imply that I’m a drain on society because <em>gasp</em> I have student loans that are unpaid while I’m sending my own child to school, but my loans were taken for my graduate program which I began in 2007.</p>
<p>As for my opinions - I think schools should be responsible for including 100% of thier costs on the aid reports they send out. Many students are parents do not expect gaps and have no idea how to address them. I am definitely not saying this should all be ‘gift’ money, but there should be an expansion of work study and the amount of government backed loans should keep pace with the out of control rising tuition costs. On the aid reports any time loans are included the schools should also be required to include an estimated repayment schedule. We need to provide adequate information to those who do not understand the process, so they can make informed decisions.</p>
<p>I understand that the cap on the government backed loans is intended to keep young adults out of financial trouble, but instead that is pushing many into private loans with higher rates, more requirements, less possibility for loan foregiveness, etc. And with the fact that private loans require credit approval, we are making opportunities available for the “haves” that are not equally available for the “have nots”, not really the philosopy that our country was founded on.</p>
<p>jrcsmom…</p>
<p>Maybe I’m wrong, but I think Annasdad was commenting on a situation where the parent has outstanding student loans that the parent has neglected to pay (and has no intention of paying). That situation does deserve a “snide comment.” And…That doesn’t sound like your situation at all. You have loans because you went to school more recently. And, it doesn’t sound like you’re defaulting on them. </p>
<p>On the other hand, S1 has a small private loan from his first year that we cosigned because the rate was much better than Parent PLUS, with no origination fee (yes, I know the rate can go up). It was a one-time thing due to some cash flow issues right when tuition was due, and it made sense for us. He also has Staffords ** so we intend to pay off the loan for him,* and it’s small enough and we’re financially stable enough that we can. *</p>
<p>And, this is a totally different situation. The PARENTS will be paying off the co-signed (small) loan (then why co-sign??? Why not just take out the loan yourself???) </p>
<p>Typically, a co-signed student loan implies that the STUDENT will be (stuck) paying back the loan, which is the POINT of this thread. No one gives a rat’s patootie if affluent parents have a short term cash flow problem and opt for a loan which THEY will be paying back. </p>
<p>The issue of the thread has more to do with students wanting to attend unaffordable schools and parents “helping” them by co-signing big loans that will very likely be a burden once the new-hire grad is on his own. When a student already has about $30k in Fed student loans, and a parent co-signs even $10k per year (sometimes more!!), then the child ends up with $70k in debt. That is ridiculous. </p>
<p>There are very few careers that have starting salaries high enough to make those payments without having to live at home while doing so. What newish grad has an extra $800 a month to put towards loans? That’s like TWO extra car payments in addition to the real one he might already have…and all of his living expenses.</p>
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How is anyone being “pushed” into private loans? No one is forced to attend an unaffordable school. It’s not the government’s job to keep people from making stupid financial choices, and a bigger federal loan burden is not going to be helpful to any student. Perhaps I should ask the government to offer me favorable loan terms so I can buy a nicer car than I can afford without being “pushed” into a private loan?</p>
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<p>Yes, and thank you. And on a system that (at least from the OP’s description) encourages that behavior. And on people from elsewhere who are quick to criticize our practices here - no harm in that by itself, I find a lot to criticize myself - but then want to come here and take advantage of our great secondary education system.</p>
<p>The snide comment was made in response to </p>
<p>“On a different note, I don’t understand why there isn’t a better loans system in the US, as we have here in the UK. Shoudn’t there be the provision for all students to go to whatever college they like, then pay back the fees with a very low interest rate, but only when they’re earning enough, my mum’s never payed hers off. It just seems like a very basic service that has been neglected.”</p>
<p>Yes, it says my mum’s never payed hers off, but at no point does it even remotely imply that she has not made any payments or anything about intent. In fact, the whole statement comments that payments should be made when debtors are earning enough, implying in fact that there IS intent to pay.</p>
<p>And for those that have government backed loans there are income-contingent and income-based payments here as well. For those debtors with very low salaries, repayments can be made based on their salaries and if 25 years of payments are consistently made, the remainder of the loan is forgiven, so we do have options here for debtors who can show that they are not able to earn adequate sums after getting their degree, although those payment options may not be available to those with private student loans.</p>
<p>I live in a VERY rural area, 30+ miles from the nearest community college and ironically both of the nearest 2 community colleges to me also happen to be located in towns with actual colleges. The IS public that my son was accepted to, opted not to give him a merit award (other posts I have made vent on that subject), the TCOA is approximately $21K. Our EFC was about $11K, with govt backed loans, there is a SIGNIFICANT gap. For people in that situation, I know I’m not the ONLY one, what do you suggest???</p>
<p>Fortunately I have an over-achiever and although our IS public didn’t want to keep him here is the state, he has enough in scholarships to make our payments well under our EFC, but that is not true of everyone. I’m guessing not even true for most. My son applied for over 30 scholarships and received 3 of them and all of them local scholarships and did not receive any of the national awards he applied for. </p>
<p>Sure there are some schools, like Bama, that offer significant aid, but those are very few and far between since most schools are struggling financially and cutting aid and even for those that have significant aid available it is only available to high achievers or those with very low incomes.</p>
<p>There are a whole lot of students in the middle - middle income families, average grades, that have VERY, VERY few options.</p>
<p>@MommaJ - </p>
<p>See above post if an IS public is ‘not affordable’ for a high achieving student from a middle income household, then there is a problem.</p>
<p>Perhaps those students aren’t pushed to take on loans, they could, of course, just opt not to go to school. </p>
<p>IS public’s should be achievable for all qualified students. Ultimately the answer is keeping tutition at a reasonable rate, but for now, students have to be given reasonable options on how to obtain the education that they are qualified for and not just told to suck it up and go work at Wal-Mart for a few years until they can afford it.</p>
<p>Chances are pretty good that it will be better for them financially to borrow (a reasonable sum, based upon their major and where they intend to work), go to school, and pay back the loans with the income they can earn after graduation, than to work for minimum wage up front, struggling to save the money they need.</p>
<p>At the risk of extending this pointless digression further:</p>
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<p>Isn’t the same as “my mum’s still working on paying hers off,” or “my mum hasn’t paid hers off yet,” or “my mum still owes on hers.” It implies that mum has never paid it off and has no intention of doing so. If you disagree about the implication, so be it.</p>
<p>There was certainly no intention to be critical of anyone who borrowed money in 2007 and still owes on it and intends to pay it back.</p>
<p>Back on-topic:</p>
<p>Should a parent EVER cosign for a private student loan?</p>
<p>Do the math (do the math, do the math, do the math!!!). Determine EXACTLY how much you anticipate borrowing for the entire education. There are plenty of online repayment estimators that will allow you to compute future montly payments. Make sure you also consider payments for any govt backed loans.</p>
<p>Figure out the approximate cost of living your student will have when they graduate. They may not know where they may be living, but various scenarios for housing costs can be looked at as well as expenses for transportation, food, utilitieis, and miscalleneous expenses.</p>
<p>REALISTICALLY look at the average income for their major and the area of the country they hope to live in and also consider what % of students in their major are employed in their fields after graduation.</p>
<p>Based on all of that, are the payments reasonable for them?</p>
<p>Are they willing to sacrifice other “luxuries” in the future for the loans now, willing to have roomates to keep rent down, willing to drive used cars? </p>
<p>As the parent know that you are responsible for the loan if the student can’t pay, or if they simply decide they’re not going to. If the student graduates and CHOOSES to default on their loan, so they can afford the new car they want, then the loan is your responsibility. Are you willing to pay if it comes to that?</p>
<p>If you consider all that and the private loans still seem to be a reasonable option, then ultimately it is your decisison to make.</p>
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<p>I’m so sorry I didn’t answer the question properly in YOUR opinion, mom2collegekids, but you aren’t the OP, and if you reread their question, I think my interpretation is perfectly reasonable. Unaffordable schools and big loans were NOT part of the original post.</p>
<p>The OP says they have a “strong income,” “0 financial aid,” and want to know if we agree that parents should “NEVER sign a student loan with their kids” (emphasis theirs). Many posters here are adamant that private loans should “never” be used. I don’t agree, so I offered one scenario. I didn’t assume the question was about borrowing the whole thing because a family with a strong income and no qualification for financial aid should theoretically be able to pay a lot from current income.</p>
<p>We had our son take out the loan because we thought knowing he was on the hook would make him take school more seriously (and it did). YMMV. But we would never borrow in private loans more than we knew WE could pay back, since it could always come to that anyway. And FYI the “cash flow problem” wasn’t affluent parent things like delayed bonuses (none of those here!), but a cancer diagnosis and the need to replace our only (17 year old) car.</p>
<p>Perhaps the OP can clarify the question.</p>
<p>I don’t really want to take this off-topic again, but just to clarify, my mum has never paid off her student loan as she has never worked full-time since getting it. That was the deal on the loan, and as she has benefited in no way from her degree, the system allows her not to pay it back. She isn’t cheating the system in any way, but if she were too start full time work she would pay it back when she was supposed to.</p>
<p>My original question was just what are people supposed to do if they don’t take out private loans. I’m sure it’s fine for some people, but what if you want to become a doctor, which will require 7/8 years of college but at the end will almost always lead to a well paid job which will make paying back the huge loan possible. Doesn’t it make sense to get a private loan then?</p>