Hi I’m a single parent working two low paying jobs and I have to take out a ‘Hail Mary’ loan for my child to go to college. She’s done her part getting some scholarships and working a job herself, but with today’s prices, it’s just not enough. I know to stay away from the Parent Plus, but where is the best place to go? What sources have you been happy with? All the interest rates are so high. It makes me sick to think how this is all going to add up. Any advice appreciated. Thanks!
Why do you think you need to stay away from Parent Plus?
The folks suggesting you stay away from the Plus loans are also,suggesting you NOT take any loans in excess of what your kiddo can take in Direct Loan amounts in her own name.
How much loan money do you need?
Because of the high interest plus origination fee. You can do better with a private loan.
I’m needing to come up with an additional 21K
An additional $21,000 per year?
I would suggest you read this thread. This student has $90,000 total in loans. Your kiddo will,have $100,000 plus if you borrow $21,000 a year and she borrows $27,000 in Direct loans over four years. It did t seem so bad taking out these loans, but now this student is concerned about the $1000 a month repayment.
Another thing to think about…many private loans begin repayment immediately after disbursement…while the Plus can be deferred until after college graduation.
You need $21,000? Is this “per year”? Are you going to end up with $84k in debt? That would be too much debt unless you’re high income.
You may get a lower rate with a private loan, but you won’t have the same protections. With Plus, you could later qualify for income based payments, if your income isn’t high enough to make the payments.
Also, if you or your child dies, a Plus loan is cancelled.
If you or your child dies, the private loan will not be cancelled.
Did your child qualify for financial aid? What need based aid did she get? What school is this that after getting merit scholarships (and maybe need based aid), etc, you still have to borrow $21k per year.
What is your EFC?
What is the net cost of this school after aid?
Is there another parent?
Did she apply to any affordable schools?
Can she commute from home to a community college for the first two years?
What is the EFC and COA?
Is she an only child?
Another thing about private loans. You, the parent, will need to qualify each year for these loans. While you may qualify the first year, are you sure you will continue to qualify in subsequent years?
Please clarify…is this $21,000 for one year…or $21,000 for each of the next four years?
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I’m a single parent working two low paying jobs and I have to take out a ‘Hail Mary’ loan for my child to go to college. She’s done her part getting some scholarships and working a job herself, but with today’s prices, it’s just not enough. I
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This may sound harsh, but I don’t mean it to be.
I understand that it’s June and your DD likely has long planned on attending this school (which sounds like either an expensive private, OOS public, or you’re in a state with a pricey state school with lousy aid.)
I know that you think your DD “has done her part” and therefore you have to somehow make it work.
I’m sorry, but it just doesn’t always work that way. In fact, it probably rarely works that way. Most parents cannot afford the schools that their kids would like/love to go to. Most students have to commute to their local CC or state school because their parents can’t pay $20k+ per year…and they know it’s too dangerous and risky and just a bad idea to borrow that much money.
Please don’t feel that you have to “save the day” by taking on $80k of debt…and PLEASE do NOT burden your child with having to pay back that much debt.
Likely, your DD already will graduate with about $27k-30k in federal student loans. THAT is the max a student should have at graduation from undergrad because that will be a “tough but affordable” loan payment (not easy!!).
Your DD will not be able to pay back an add’l $80k of loans. She won’t be able to afford that.
You have written that you’re a single mom working TWO LOW PAYING JOBS, sooooo…not only will you not be able to afford to pay back $80k of debt…you will not qualify. You “might” qualify the first year, but once you have that $20k of debt on your record, a bank isn’t likely going to qualify you again…and then your DD would have to come home with NO degree…AND THEN WHAT???
I’m curious…how were you planning on paying for college? Why is this coming up now…in JUNE…when this info was likely known last March or April?
What other options are there? Did she get accepted to a local state school? Can she go to a local CC?
Planning on paying with a loan. No CC is not an option. The school gave some aid and scholarship. We are left with about a third of the cost.
Every year for 4 years.
What is EFC?
Yikes!!! Every year for four years?!?
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school gave some aid and scholarship. We are left with about a third of the cost.
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Sounds like a private univ that costs about $60k per year, but doesn’t meet need.
Your DD already has full fed loans in her aid pkg, that she will have to pay back.
WHO will be paying back that $85k+ additional loan? You?
Can you pay $800 a month now towards college? Probably not. So how could you make $800 a month payments for your DD while paying back those loans?
A CC may not be an option, but what about a local university?
What will her options be if you can’t qualify for this first loan?
What will her options be if you can’t qualify for the sophomore year loan? Or junior year loan…or senior year loan?
EFC is the number that was calculated after you filled out FAFSA…what was it? Sounds like it may have been 000000
EFC is your Expected Family Contribution. It is what is computed by the FAFSA as the minimum you will,be required to pay yourself for college costs.
This would,have been on your students SAR (student aid report). It is largely based on your income.
Really, the FAFSA is used to determine need federally funded need based aid. This would include a Pell Grant (did your daughter gat a Pell Grant?), and federally funded loans in yoir daughter’s name.
Are you able to pay any of her costs out of current earnings or savings?
What is this loan amount relative to your income? As I said earlier, you will need to qualify again next year…and you will already have a $21,000 loan.
Also, can YOU repay these private loans…starting now?
ETA?..if you are left with $21,000 which is a third of the cost…this is a very expensive college. And it sounds like one that does NOT meet full need for all accepted students.
Please don’t tell me this is NYU!
Is there another parent?
Is she an only child?
http://www.consumerfinance.gov/paying-for-college/choose-a-student-loan/#
Start at the cfpb. It will explain and compare the different types of loans and the benefits of each kind. The Parent Plus loan can be a good option even if a private loan has a lower interest rate because of the protections of the Plus loan. A Plus loan is to the parent, a private loan can be to the parent or the student.
That is really a lot to be borrowing, and I assume your child is also borrowing $5500+ per year in Stafford loans (school or state loans? Perkins?) That $21k per year will be $100,000 by the time the student graduates with all the fees and interest. Your loan payments might be $2000/month. If you can’t pay that now, how will you be able to pay that in 4 years? At least with a Plus loan you could be eligible for a payment plan.
How do you know you will even qualify for a loan for the second year of college after you take out a loan of $21K for the first year?
The qualifications for plus loans are pretty lienent. Private lenders can set different requirements, but they too are usually easier to meet than for other non-secured lending.
This mom indicates that she is a low wage earner working two jobs. I highly doubt that a bank is going to approve these loans year after year. If she has no debt now, she might get approved for the FIRST year…but then she almost surely will get denied the second year.
This sort of debt is crazy, even for those who aren’t low income.
I think the mom thinks that this is what many people “have to do.” NO. There are always other options. Always!
The mom needs to consider this: How much can you pay each month NOW towards college for 48 straight months? $200 a month? More? Less? How much?
@MaxedOutMom
If you’re low income, then likely you can’t pay now pay more than $200 a month towards college. That means that you won’t be able to afford the $1000+ a month payments when your DD graduates. Where would that $12k+ per year come from to pay those loans back? Your DD will already have her own loans to pay…and those will be more than enough.
Your screen name is very telling. You’re feeling “maxed out.” This has all hit you like a ton of bricks. We understand. It’s a horrible feeling when you can’t afford the school your child wants.
This should not be a situation where you just sign your name to “put off” the problem of affordability until “later”.
Please don’t be thinking: “I’ll worry about the debt later. Right now, Susie wants to go to XXXX and I can’t break her heart.”
Believe me, you’ll break her heart later when she sees you drowning in debt because of a silly college choice…or she’ll also be drowning in debt trying to help you pay. She’ll be MAD at you for a much longer time for not saying “no” when this problem surfaced. She’ll be mad at you for not having been the “adult”.
It’s time to put the Big Mommy pants on…
Ack!
OP: It’s not ideal to tell your daughter now that you can’t afford her dream school. It’s far worse to tell her you can’t afford the next semester’s tuition when she’s a junior and you’re $42,000 in debt, at which point she’ll need to transfer to a directional, drop out, or leave temporarily to work and earn some money towards the cost (this often ends up being a permanent arrangement, leaving a student with no degree and significant debt). None of those options will be pleasant.
That $42,000 (plus whatever you could pay without debt) can fund 2 years of community college and get your D at least to the end of her junior year once she transfers to a 4-year public university after the 2 years at a CC. She might even make it through her senior year, if she lives at home and commutes to the public U. Even paying for room and board, with $50,000 (which is a lot of debt, mind you) she could have her degree, and scholarships/need-based aid/part-time work could reduce the cost further.