Should I take out a loan for personal expenses at UChicago?

Paying for College
1

<p>Hi everyone!</p>

<p>I would like your advice on this issue. I got accepted to UChicago, and they already gave me a stellar financial aid package. I got all of tuition and room and board paid for thorugh federal grants and school grants, and work study covers some miscellaneous 2000 dollar fees like the Student Life Fee and some other administrative stuff.</p>

<p>Now, I have a dilemma... I have to find ~$4500 for the following year. Approximately 3500 covers airfare, books, transportation, clothing, toiletries, and some miscellaneous expenses. Healthcare which is required at UChicago was originally 2000 extra on top of all of this (so I originally had to find 5500), since I never had health insurance before now, but I applied to Aetna, and my premiums are $47 a month, so about 600/year, plus whatever deductibles I'll have to pay for going to the doctor. So now, I need to find a way of getting of getting approximately 4500 a year.</p>

<p>Summer employment will only get me so far. Since I'm vegetarian, I pay for all my own food in my house, and I pay for my cell phone bill and whatever money I need for personal expenses. So I'm guessing only about 1500 after summer employment saved.</p>

<p>My options are:</p>

<p>1) Beg my parents for money. This really is the last option, since they originally had the idea of me going to a state school, which in reality wasn't necessarily cheaper since UChicago is paying room/board, and the state schools wouldn't do that from the fin. aid packages i got, and so it would really wouldn't be cheaper. However, this really is the last option, while my parents have some money, there are five children already in college, a failing self-run business, and a crapload of healthcare expenses since my father is a heart patient and my grandma is a diabetic. So this is really a hassle for them. Plus, while they would have some money, I really want to show them I can manage this on my own, since I wanted to go out-of-state and to UChicago, my dream school so badly.</p>

<p>2.) Beg the fin. aid office for some sort of stipend for books or something. I'm doing this on Monday, but I'm very pessimistic about this. They probably wouldn't give me a stipend, since so many students are on loans, and it isn't fair they are on them and I am not.</p>

<p>3.) Take out a loan. This is like the last option tied with begging my parents for money, lol. If something happens along the way in the next four years, and even into the next 8 since I'm going to professional school, I'm screwed with student debt.</p>

<p>4.) Apply to a million scholarships, which I won't hear about until July, which is a bad time to know about the money I'll need for the Fall. I applied to a million already, and I've won a little over 200, lol. Gates-Millenium and Questbridge both screwed me over by taking me into the finalist round, and then dropping me like a hot potato.</p>

<p>Please, if anyone has any suggestions, I would love to hear them.</p>

<p>Thank you!</p>

2

<p>You may want to wait a bit to make your decision as grads are sometimes surprised at the amount of cash that suddenly flows their way in June! Did your sibs receive generous gifts from family and friends at their grad parties? Does your HS have a senior awards night where they give out the smaller local awards/scholarships? (My D received several thousand from that and some of her classmates won even more). But you may want to consider taking the subsidized loans in any case. </p>

<p>I assume you mean that you have been offered Stafford and perhaps Perkins loans. Remember that “subsidized” means you won’t be incurring interest charges and that money is also excluded from the FAFSA asset calculation, so taking at least the subsidized portion of Stafford and the Perkins loan may be a smart move…you’ll never be able to borrow at better terms than that! It can give you a cushion for unexpected expenses such as an emergency flight home, the deductible on your medical costs, summer coursework, prep/test fees for professional school, etc. and, if you don’t use the money, it can be paid back at any time.</p>

3

<p>Maybe you could ask your parents to buy your vegetarian groceries so that your earnings aren’t going towards that.</p>

<p>You could just add your items to their grocery list. Be reasonable in your requests. A vegetarian diet isn’t more expensive, so it’s reasonable that they pay for your food while you’re at home.</p>

<p>Your work-study is supposed to cover your personal expenses since you won’t have that money upfront to pay for any fees at the beginning of the semester. Did you realize that? So, you’re probably going to have to use your summer earnings to pay for your Student Life fee and such which will come due when school starts.</p>

<p>Maybe you can ask for an increase in work-study. They probably could add a technology allowance to your COA which would allow them to increase your work-study amount.</p>

<p>You might also get your parents to pay for your transportation costs and toiletries. They may be willing to help you with transportation costs since without their help, you may not be able to come home.</p>

4

<p>Get a second summer job.
Bartend, wait tables, Starbucks whatever-begging parents for money eats at your soul.
Cancel plans to come home at Thanksgiving, save $$$.</p>

5

<p>Take a Stafford loan. It’s not too much money to borrow at all.</p>

6

<p>Doctor Classic Rocker Dad (now that I know that you’re a brainiac from MIT, I respectfully use your deserved the title… :slight_smile: )</p>

<p>I have a problem with taking a Stafford loan for things that can be paid for with a part-time job.</p>

<p>I speak from experience. My H and I both had some student loans. Mine totaled to less than $1000k. His were a lot more. His were not for tuition or R&B (he had a scholarship for that). His were for “personal expenses” - which were unneeded if he had just worked a part-time job. </p>

<p>My loans were quickly and easily paid off long before we married, while his were a pain in the butt for many years. The annoyance was exaggerated because he admitted that he lived “high on the hog” during those years - restaurants, dating, etc. He acknowledges that he easily could have worked a part-time job. So, here we were, a married couple buying our first home while also paying back his dating money??? Ugh! </p>

<p>Minimize any loans. Most students have plenty of time to work 6-10 hours per week at a part-time job during the school year and still have PLENTY of time for studying and a social life. And, most have plenty of time to work 40+ hours a week during the summer (I was working 3 part-time jobs in the summer at one point to get enough hours).</p>

<p>I would ask my parents to pay for my vegetarian needs so that the max of your summer earnings can go towards your immediate college needs. Then use work-study earnings for personal expenses.</p>

<p>If your parents expect you to come home for mid-year visits, then they can pay for them. If they can’t, then you’re under no obligation to pay for what you can’t afford.</p>

<p>P.S…don’t buy your toiletries at the school store. Tag along when a friend with a car goes to the local Wal-Mart or Target to buy your personal needs. </p>

<p>Also…get in good with a prof or two. Sometimes they’ll send you some opportunities to earn extra cash. My son has been a “copy editor” of sorts for a few foreign-born profs who need a bit of English help with their writings for publications. My son has pocketed some nice cash for that.</p>

<p>Also, see if the school has any kind of paid tutoring service. Both my kids were hired by the college to tutor other students in Bio, Chem, Calculus, Physics, and Spanish. Those jobs aren’t usually work-study because you need those skill and desire for that kind of work.</p>

7

<p>1]You can save a LOT of money if you buy used books online, instead getting new books at the Chicago bookstore.
2]I can’t tell if you are a guy or gal, but you can find lots of heavily discounted great winter clothing RIGHT NOW online. When my son found out he was transferring to Chicago from LA, I went online and found the winter gear- down jackets, warm insulated boots, lightweight long underwear, wool sox, gloves, knit caps, etc that he needed - all on sale- from sites like Backcountry.com, sierratradingpost.com, etc. You may want to go on the Chicago forum and ask for recommendations of the kind of gear you will need.
3]Southwest airlines flies to Midway airport- go online and book cheap tix right now.</p>

<p>Get a summer job AND ask your parents for money. If they are net saving $$ because of your package at Chicago, then they should be able to scrap up a little $ for your expenses.</p>

8

<p>I know you’re planning to get a summer job – that’s good. But also look for some evening or weekend work – possibly tutoring some other students on SAT or ACT. You can earn some really good money, and you probably didn’t get into Chicago without some pretty good test scores. </p>

<p>Unless you’re including the cost of a computer in your personal expenses, they seem really high. Your clothing needs are not going to be ridiculous. A really good winter jacket, a thick polarfleece jacket, rain jacket, waterproof hiking type boots and a hat and good gloves and warm socks are the basics – and you’d be surprised how much of this you could find in some of the better thrift shops in cold weather areas. </p>

<p>Also, check on flight prices out of FLL vs. out of Miami – I usually find that FLL is substantially cheaper, and the extra ride to get there is not long. We’ve even sometimes found the best fares out of Palm Beach, so check it too. (A $200 savings on airfare is rather nice.)</p>

9

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<p>With all due respect, from a business perspective, I disagree. </p>

<p>I took small student loans rather than working for peanuts at a part-time job and put the hours into studying (which took most of my waking hours). I think the return on investment was very much positive. We’re not talking about an irresponsible amount of money here. Investing in oneself can be very worthwhile.</p>

10

<p>^^^</p>

<p>Your theory is based on an assumption that your grades would have suffered if you had worked a few hours a week. I really doubt that. :slight_smile: I have yet to meet a student who spends every non-classroom waking moment studying - unless he has some kind of learning issues.</p>

<p>And, in this case, we’re really talking about a SUMMER job - because the student WILL be working during the year for his WORK-study job. :slight_smile: If this student can figure out a way to avoid taking out $20k in loans by working in the summer and having his parents pay for her vegetarian diet and such, that is a wiser thing to do - from a business model.</p>

11

<p>The way I read it she would only net $1500/summer and would still be short $4500. I’d still borrow $5500 to leave a little cushion. She can certainly borrow the money every August after she knows how much she needs. </p>

<p>My take is that from the point of view of a poor kid who financially qualifies for Questbridge, it may seem like lot of money. From the point of view of a UChicago graduate, it’s not likely to be a heavy burden. </p>

<p>BTW, I had to quit my job in October of freshman year because I couldn’t handle it with school, but that was MIT, and it was unimaginably hard for me. I didn’t spend EVERY minute studying, just most of the minutes while I was awake. Mom2collegekids, if you have yet to meet one, if you consider that you’ve met me virtually, than you’ve now met one. :-)</p>

12

<p>Thanks everyone, by the way, I’m a he, lol.</p>

<p>After looking at some of the responses, I think I’m going to take out a subsidized loan, just in case, and work three jobs over the summer. I work three jobs now actually, as a tutor, bullet sorter and frycook, so it would be easiest over the summer anyway. I’m gonna save up whatever money I need as much as possible, whatever I don’t need, I’m just gonna pay it off immediately. I’m just afraid that I’ll be placed in a very bad predicament, since student debt is no joke…</p>

<p>Thanks!</p>

13

<p>^^^</p>

<p>Good! Cuz I was concerned about how you’d meet the immediate costs “Student Life Fee,” etc. You can’t wait for W-S money to pay for that!</p>

14

<p>Whatever you do, if you take out a subsidized loan, don’t pay ANY of it back before it starts actually accruing interest, which is after you are no longer a full-time student. There is usually a 1.5% fee, and even if you borrowed on Monday and paid it back on Tuesday, you’d still be out the 1.5%. Borrow the money and pay it back AFTER you graduate. For non-subsidized loans, interest accrues immediately, but you still have the origination fees. Pay this back early only if you won’t need to borrow again - i.e. get hit with another origination fee. In either case, learn how to do the math. Learn how to use the PMT() function in Excel to figure out your payments. Math is your friend. </p>

<p>While student debt is no joke, it’s only a problem if you can’t pay it back. You should have no trouble paying it back.</p>

15

<p>bullet sorter? what’s a bullet sorter?</p>

16

<p>I’m with Classic Rocker Dad - no low income student planning to go on to professional school should forgo ANY opportunity to borrow subsidized loans. They can be stashed in an interest bearing account until they’re needed and will be much cheaper than borrowing at GradPlus rates. To remain debt free now could be a big mistake later. Do NOT pay back any subsidized loans until you’re done with school!</p>

17

<p>Umm. If you stash the money into an account, wouldn’t it count against you for future financial aid? I do agree that subsidized loans are a good source of needed funds. However, I have also seen a lot of kids look at this as “found money” and end up spending it as if it is a windfall. That kind of mentality can be very dangerous. Makes you feel like you have more than you do, and it’s very addicting.</p>

<p>My friend’s daughter did this. She owes $80 in loans, as she found them easy to get and though she started out frugally, by the time she was a senior she had become inured to the amounts and the fact that she owed the money. It happens a lot. </p>

<p>Neither of my sons who are out of college have any loans outstanding. They worked hard every summer and we really helped out to avoid taking out any loans. They see many of their peers who are struggling with loan payments while working at the same low paying jobs they are, and they are grateful that they do not have those payments. They have a clean slate for any grad/pfo school loans. It does feel good to be loan free.</p>