What is the best option for a smallish loan.
Out of pocket 20K
Stafford loans -5500
Leaving 14.5K I can probably swing 7500 the first year and 10K going forward.
Leaving a balance of ~7K I need to borrow somewhere
What are my best options, besides HELOC?
First I would have your student work. They should be able to earn $1K-$2K during the school year and $2-$4K in the summer. That closes at least some of the gap.
Look at parent plus loans (current rate 5.3%), but you still may get a better rate on a HELOC. Looking forward to hearing others’ suggestions.
Kid is industrious, typical teenager jobs hard to come by in NJ with all the lockdowns and reduced capacity. He made 5k flipping stuff he found in the trash and repaired (bicycles, lawn equipment, or anything else he could make a buck on) on let go. 4K of that is in an Edward Jones account for books and whatnot… he wants to play football so his earnings capacity will be diminished. He would ideally like to coach college football, but is pursuing history/secondary education as a “realistic” career
Sounds like your S is a go getter!
Plenty of student-athletes have college jobs where they work 5-10 hours per week, often in the fitness center or athletic offices. There is time for work, especially if they are playing D3. He can use the student career center to help find summer jobs as well.
Teen/young adult males are often in demand for babysitting jobs as well…in my area they are paid $15+/hour, cash. He could also get certified as a referee/umpire, run football skills clinics for younger kids, and/or do private lessons. These are some of the things I have seen our local sporty teens doing during covid.
He was reffing flag football, missed 2 weeks due to coming in contact with someone at school and ensuing quarantine. Not sure if winter sports are even going to happen here, he could ref rec basketball if they do.
Can you get on a tuition payment plan? If so, you may find it possible to cut back spending enough that the monthly payment may be possible without borrowing. It’s easier to manage monthly payments sometimes. Just a thought.
How much potentially can this parent get in tax credits or whatever that can then be applied to subsequent years?
Potentially, $2,500 for each of four tax years from the American Opportunity Credit.
What kind of account at Edward Jones and what is the expense ratio? I’ve got to believe that an account at Vanguard or a similar low-cost asset manager would be a better deal.