<p>I posted this in the FinAid section but this part of the site gets much more traffic, so I figured I'd ask here. And thanks to those that have helped already.</p>
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<p>In filling out a financial aid estimator for Princeton, it pretty much told me that my family can easily afford to send me to a private college. However, they have pretty much told me that I have X dollars saved for college and that is what I have to spend. I have always assumed that I'd get a student loan from a bank (e.g. Wells Fargo student loans), but is this even an option? </p>
<p>Or does it work such that I would get no aid at first but once I'm independent and my college money is gone THEN I get financial aid?</p>
<p>Need-based finan aid is based on your family's ability to pay. From what you've said about the finan aid estimator, you don't expect to qualify for any need-based aid. That is pretty much it. You can get a government subsidized loan but it will probably not be enough to make a big dent in the $45K per year that colleges are looking for. Once the money in your college fund is gone, you will NOT get finan aid because the finan aid is based on your family's ability to pay. The following are the rules:</p>
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If you will be 24 years of age by December 31st of the award year, will be working on a master's or doctoral program, are married, have children who receive more than half of their support from you, have dependents (other than a child or spouse) who live with you and receive more than half of their support from you, are an orphan or ward of the court, or are a veteran of the U.S. Armed Forces, you are considered independent and do not need to provide parental information on the FAFSA. All other students are considered dependent and parental information is necessary.
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<p>It really has to work this way or else all parents would just refuse to pay. I'm sorry. Either your parents change their minds or your college fund is close to $200K or you get married. Otherwise you should look into a financial safety. This is one of the reasons that people get accepted to ivies and chose to go to public universities.</p>
<p>And there aren't other loan sources out there outside the government ones? My family seems to be under the impression that I could get a loan from just about anywhere (major banks, etc).</p>
<p>You might be able to put together something using loans and working at on-campus jobs. The student loans that you get thru the government are generally from banks. The bank loans you the money and the government guarantees the loan. </p>
<p>Think of it this way. Somebody walks into a bank and says that they need to borrow $100K. The loan officer asks what collateral you have. You say none. The loan officer asks where you work. You say that you don't have a job. Nobody is going to loan you the money. If your parents co-signed the loans, that would work. Co-signing a loan means that if you don't pay it back, then they have to pay it back. I don't know if that solves anything.</p>
<p>Also, as soon as you take out a regular loan, you have to start paying it back with interest. One of the nice things about student loans is that you don't have to pay anything back until you graduate.</p>
<p>For what its worth, your parents are not being particularly difficult about this. Need-based financial aid drys up when the family income gets up around $120K per year. This is not a huge income when both parents are working. To suddenly have to start shelling out $45K per year means about $4K a month. Very few people in the $120K per year bracket can suddenly start paying out $4K a month in addition to all of their other bills. You really might just think about whether going to an elite school is worth the money or whether you'd like to graduate debt free and save your parents $100K. Many people elect to save the money. </p>
<p>There was a study done comparing income of graduates from elite colleges versus the income of graduates from less prestigious schools. As you might expect, graduates from elite colleges make more money. The interesting thing, though, is that there is no statistical difference between the incomes of graduates of elite colleges and people who were accepted to elite colleges and decided to go somewhere else. This is a pretty well known study. I know that Mathews mentions it in "Harvard Schmarvard". Another consideration is whether you plan to go to graduate school. If you get a doctorate, then where you got your undergrad degree means nothing. The same goes for Med, Law, and prestigious MBA's. Going to a public school doesn't hurt your chances for admission to post undergrad work, and can even help because your gpa/rank may be higher.</p>
<p>Of course, going to an ivy is more fun and I'm not trying to talk you out of it. It does start to be like buying a car though. You can buy a Porshe and be in debt or a Chevy and use the money for something else. People want the Porshe.</p>
<p>My parents said they would be willing to co-sign on a loan. I guess this is what they may have been talking about earlier. With this in mind, what do you suggest?</p>
<p>I would suggest you really consider how much you want an exensive school. Ending up with $100,000 or more of debt for an undergrad education may not be something you want to do. Those loans could mean paying back a few thousand a month as soon as you graduate, impossible or very hard for most. You'll live crummy for a long time.</p>
<p>I would not take my suggestion too seriously, but it is usually a good idea to try to understand why people do or say what they do or say. By offering to sign on the loan, your parents are taking responsiblity for the loan. The loan will be in your name, but if you default, they are legally bound to pay it off. This may indicate less of a worry about the money and more of a worry about you taking responsibilty and understanding the kind of money that is involved. If you attend an ivy, you will have a big debt after four years. This may affect your ability to go to grad school. If you attend a state school, your parents will probably let you keep the money in your college fund and you will have a surplus to get started in life. When I say it this way, it may sound as if I am favoring the state univ, but I would understand what you do either way. To get you to think this way may be just what your parents are trying to do. You are actually lucky. There are going to be alot of threads in a few months about applicants who can't attend any college because their parents are just total jerks.</p>
<p>To sum it up: The difference between a public uni and a private school is going to be in the range of $100K over four years. Your parents are willing to commit to the money, but they probably don't think that it is worth it, and they want you to take responsibility for the cost. You can't expect them to pay for it if you don't think it is worth it either.</p>
<p>I didn't mention this before because your parents said that they wanted the loan in your name, but since they said that they would cosign... The federal government has PLUS (Parent Loans for Undergrad Students) loans. The maximum amount borrowed can be the full cost of college. It doesn't depend on assets or need, but the parents do have to have a good credit history. The loan would be in your parents' name, but the interest would be better than a loan in your name with your parents cosigning.</p>