<p>My mom did a lot of money talk to me these days.... I haven't pay any attention till our dinner-talk today.
She told be because of the economic crisis, she lost almost 100,000 in the stock market (from 120,000 to 20,000). and she said that was my college fund.
but she also told me not to consider money when I'm choosing schools. I asked her if I can take out student loan, she said as far as she knows, I can only take out 3,000 per semester. And she said parent loan has a very high interest rate, she might not be able to pay back. "I'll find a way to borrow money" this is the exact word she said.
I was shocked. I never really worried about money before. My mom has a 110,000 income(after tax). And I thought a year of her salary can afford 4 years of my college!
So parents, there gotta be something that I don't understand... tell me what I'm missing...
thank you very much</p>
<p>Well sure a year of salary can pay for a significant portion of salary. Though the problem is that that salary has to pay monthly food, electric, car, house, etc. bills so the amount left that can be allotted for the college fund is significantly less. That's why you slowly build a college fund over many years (which your mother did). However the huge loss is the result of this economic crisis which is a similar position that many other people are in.</p>
<p>Non-subsidized loan is around 7% and you could take out as much you need to pay for tuition, room and board, but only if your parents have good credit. It is very hard for me to believe your mother lost 5/6 of your college fund, the stock market didn't lose that much in value. One year private school cost is around 50,000.</p>
<p>oldfort
that's is what my mother told me
thanks for the reply tho</p>
<p>and here is my other worry... My mom just had her 56th birthday on Nov.10.... she is getting old.... Is she also saving up for her annuities(sorry for the dictionary word) ... if yes, how much will it be?</p>
<p>and thank you nd09
but let's say I spend 1,500 per month (which is a maxium for me, I guess). My mom also spend 1,500 per month. (1,500+1,500)*12=36,000, 110,000-36,000=74,000
and for the car and house... we don't move or buy new cars regularly.... this really confuse me....</p>
<p>I think you are referring to your mother's 401K or pension? She could very well be saving through her company's matching fund. It doesn't sound like your mother has been very prudent with her financial matters, your best bet would be to look into schools with good merit aid. You don't want to be in a situation where you may need to drop out after a year due to financial hardship. I would also be careful on how much debt you would go into for undergrad.</p>
<p>smalllab - how do you know 110,000 is after tax money? If it is gross than there isn't much money left after tax, and my gut tells me it costs more than 3000 a month for two of you (after mortage/rent, utilities, food, gas, health insurance...).</p>
<p>smalllab, any idea what the family mortgage is? How much your family spends on food a month? What tax bracket your familiy is in? Have any siblings?</p>
<p>you're totally right!
health insurance and mortage.... and I have no idea how much that is.....
If I can take out loan.... does the loan really worth paying back after college?</p>
<p>thanks a lot oldfort</p>
<p>Youdon'tsay, thanks for your reply</p>
<p>I have no idea how much my family mortgage is....and I don't even know what a tax bracket means.... I don't have any siblings.... </p>
<p>now I kinda get why my mom is worried....</p>
<p>Smalllab, I think you and Mom should go onto the FAFSA website and do a preliminary check of how much you would be expected to pay for your college costs. I would not recommend taking out loads of loans, be realistic, will you be aiming for grad school down the road? Save the loans for that. Try to help out Mom by staying in state or local so that you can cut back on costs, once at school maybe work as an RA to minimize your living expenses, plan on a part-time job. Keep all your options open but please don't have your head in the clouds. Good luck!</p>
<p>A student can only borrow up to $5500 freshman year, $6500 sophomore year, and $7500 junior and senior years in government Stafford loans. If there is need (cost of attendance-expected family contribution determined from the FAFSA info-total of all scholarships/grants/work study), up to $3500/4500/5500 of that can be subsidized; the remainder is unsubsidized. The interest rate on sub is currently 6% and interest doesn't accrue until the student has been out of school for 6 months. Unsub interest rate is 6.8% and interest begins accumulating immediately (can be rolled into the loan to be paid later - you'll owe interest on the interest). </p>
<p>Any amount you still need to borrow beyond that would have to be a parent PLUS loan (8% interest - repayment begins after a few months unless the school is a direct lender, in which case it can be put off until 6 months after student leaves school - interest accumulates immediately). If the parent's credit is denied, the student can borrow another $4000 in unsub Stafford ($5000 for juniors & seniors). The only other alternative is a private loan, which is not too easy to get these days.</p>
<p>Smalllab, your mom has a lot of bills to pay with her salary (which is reduced by taxes before she even gets her paycheck). Even if you own your house, there are taxes, utilities, maintenance. Add in car insurance & maintenance. Don't forget household supplies, food, cleaning supplies, and all the many little expenses that pop up daily. She doesn't actually have the amount of "extra" money you seem to think she has.</p>
<p>It depends on if you are getting a degree that would lead to a high paying job. If you want to be a free spirit to pursue your passion after graduation then do not take out loan. My daughter is considering finance, so she is going to owe me $40,000 by the time she graduates to go to a top tier school. She had a choice of going to a next tier school with a full ride. To take out a loan, you'll need someone to co-sign. Why don't you ask your mother what she could really afford per year for college, then go from there.</p>
<p>Smalllab - many people spend 25-30% of gross income on their mortgage and property tax.</p>
<p>Kelsmom, thank you very much.
Now I understand where all the money goes. I guess I'll attend a state school instead.</p>
<p>sure I will.
But I'll wait till my offers come.
I guess I'll attend UMCP instead... thank you very much!</p>
<p>thank you OaksMom,
I heard RA is a very good choice. But I think I need another part time job to pay my tuition...
I rather let my mom keep her money for her later days...</p>
<p>
[quote]
she lost almost 100,000 in the stock market (from 120,000 to 20,000)
[/quote]
</p>
<p>Your mother is not alone in seeing stock market accounts plummet! And it wasn't like she had to have invested in speculative tech stocks. Just owning the wrong financials (think Lehman Bros, Citigroup, among others) and only financials could have killed you.</p>
<p>This is a good time to bring up a good financial lesson for you to learn. If you have money invested for a certain purpose (like college), if you need a certain amount of money within the next three years, that money has to be in cash. You can't take the chance that a stock market tumble could wipe out your $$.</p>
<p>Good luck. Just know that you won't be the only person around who has been hit by the financial turmoil.</p>
<p>It has to be in cash?
Why can't she just use her salary?</p>
<p>sorry I'm kinda stupid.... and I think I'm probably going to a state school with a part time job.</p>
<p>thanks for your reply</p>
<p>Mortgage, property taxes, home insurance, medical insurance, car loans, car insurance, life insurance, credit card bills, food, electric bill, internet bill, cable bill, water bill, heating (oil) bill, gas for the car, land line phone bill, cell phone bills, dental bills, if you have a pet--add pet food and vet bills, clothing, personal expenses, etc. all come out of your mom's paycheck. What looks like a decent income, often times gets chopped down to just enough money to get by every month. In addition, parents have to try to save enough money on hand to tie them over and cover essential bills for a few months in case they can't work because of sickness or in case unexpectedly get laid off from their job. </p>
<p>There is nothing wrong with going to a state school. More and more students are applying to state schools because of the current economic climate. You're not alone.</p>
<p>Maybe you could have another talk with your mom? I know I'd rather have my daughter talk to me....</p>