<p>As a parent of a student wishing to pursue a BFA MT degree I have been investigating what loans are available and it has been eye opening. For those of us who don't qualify for need-based aid, but don't exactly have a money tree growing in the yard it helps to know the pay back reality.</p>
<p>I personally won't touch a Parent Plus Loan if I can help it. The interest rates are high and for us, the interest compounded upon inception.</p>
<p>Here is the best loan I found so far:
Wells Fargo Collegiate Loan</p>
<p>It is for students who can get a cosigner. At the variable rate, monthly payments on $10K borrowed are $82.74 currently. At the fixed rate, monthly payments are $120.94 on that same $10K borrowed. </p>
<p>What I really like about this type of loan is that after the student has made TWO years of payments on time, the cosigner can be removed! Yes!! So, for those parents who do not want to assume their student's debt in the event these students make poor choices, don't actually graduate, or whatever, we would technically only be liable to pay those first two years for them on time. Much less risky, right?</p>
<p>In another thread a young person was inquiring whether he/she should allow $100K debt for college. Unless said student is planning to have an extra $827.40 - $1200.94 per month to pay on loans 6 months after graduation, I wouldn't recommend it!</p>
<p>Would love to hear other loan research or ideas for MT parents to get good loans...</p>
<p>Great post . . . I think it’s also important to remember that interest rates will go up (which you hinted at with the variable rate shown) so payments at 4% interest vs. 7% will look a lot different. Also something worth investigating are the differences between subsidized and unsubsidized loans. You might be surprised how quickly interest accrues on an unsubsidized loan. Down & dirty definition: [Subsidized</a> vs. Unsubsidized Loans](<a href=“http://www.csus.edu/sfsc-ymm/03_student_loans/sub_and_unsub.html]Subsidized”>http://www.csus.edu/sfsc-ymm/03_student_loans/sub_and_unsub.html)</p>
<p>I just finished a combined BA/Masters in Education and was fortunate to have a lot of grants and scholarships. But I did need loans for the Masters portion and I am very happy with my Staffords through Sallie Mae. I am currently unemployed and they have deferred it without interest which has helped a lot. I do not plan to do a Parent plus loan for d because of the interest rate. She was lucky to get a few grants and scholarships too so there isn’t a lot of loan debt at the moment.
PNC bank has good college loan rates, I have looked into them as well.</p>
<p>We also don’t qualify for any need based awards or subsidized loans - can you tell me what the wells Fargo or pnc bank interest rates - both fixed and adjustable are currently? I assume the interest starts immediately vs after graduation?</p>
<p>It’s also a good idea to calculate the entire amount that will be paid over the term of paying back the loans. What may be looked at as $10,000 or $50,000 in debt, in reality is much more. </p>
<p>I can’t overstate the caution against these theatre kids taking on too much debt. It will substantively affect their ability to pursue their passion upon graduation if they have large loan payments due every month. In addition to that, keep in mind that if you have a student who will likely be making the move to NYC upon graduation, they will need several thousand dollars in ready cash to get started and settled there.</p>
<p>The current rates for Wells Fargo are: Variable/ Min 3.500% Max 9.990%; Fixed/ Min 7.240 Max 13.990% (I assume the rate would be based on cosigner credit rating)</p>
<p>Criterion are:
No payments are due until six months after you leave school. </p>
<p>Some options to lower your interest rate: Automatic payment discount Lower your interest rate by 0.25% when you set up an automatic payment from a personal checking or savings account.</p>
<p>Wells Fargo Student Graduation BenefitSM Lower your interest rate by 0.25% after we verify that youve graduated.</p>
<p>Relationship discount Lower your interest rate by up to 0.50% if youre a Wells Fargo customer. </p>
<p>You may qualify for multiple discounts that can add up to great savings over the life of your loan. </p>
<p>How much you can borrow There’s no annual maximum you can borrow up to the cost of education (tuition, books, etc.) minus other financial aid.</p>
<p>The aggregate loan limit is $120,000 including all other educational debt.</p>
<p>Your financial aid officer will certify the loan amount you are eligible for.</p>
<p>Given that I have two kids to put through college and am in my mid-50’s, my junior daughter is going music theater, and that my 10 year old is starting to show interest in theater, I have calculated that I’ll be able to retire somewhere aorund the age of 123. Should give me plenty of time to pay off any loans!</p>
<p>^ I’m right there with you but my son is a sophomore now at NYU and my daughter will be a freshman at Northern Illinois next fall. Sticker shock- yes. Guess it’s back to Ramen noodles and rice for dinner-lol</p>
<p>If you want to start paying back immediately rather than waiting until after graduation would a home equity loan be advisable? What are the pros and cons?</p>
<p>An equity loan does seem like an option because the tax advantage could be helpful. In my case my primary residence is upside down and banks don’t like to give equity loans for rentals which 2nd my home (the one with equity) currently is!</p>
<p>Here we are - a pair of those naive parents who believed that awesome grades, great SATs and lots of volunteer work would help get merit aid. What it did do was get our S into a some good colleges that we can’t afford. We need loans to cover part of our EFC. I see Wells Fargo discussed above. Does anyone know how Sallie Mae loans work? Do they have to be part of your financial aid award or do you get them on your own? The rates look lower.</p>
<p>Fabulous post. THank you. As a single mom who is facing this now with my third child, this question is very timely. And it’s definitely not a matter of just ramen noodles or living with less. It’s question of going under and losing my house. It’s scary.</p>
<p>About Sallie Mae. I already have some loans from Sallie Mae for my son. They do defer and work with you, but BEWARE any college loan. “Sallie Mae” sounds like your elderly aunt, but she can be a huge b***! Remember, remember that student loans are not dischargable!!! You can never escape even if you’re bankrupt. They can garnish from tax returns, social security payments, etc.</p>
<p>I’d strongly discourage anyone from pursuing non-fixed rates. This will take many years to repay.</p>