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Need advice.

golfnutpsu

Well-Known Member
Mar 12, 2012
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After 8 years of college for kids, need some advice on loan options for last one. Out of money. Looking for recommendations for loans for last daughter. Thanks in advance.
 
I put 2 through, and 1 is still in.-- Its tough. No loan recs, except try to get subsidized loans (lower interest rates) vs non federal unsubsidized loans
Other things must "give" as well,- -we have not bought a new car in >10, and have bought quality used. Many things like this will help. Good luck, its tough on the middle class.
 
I'm sure you'll get some pretty terrible responses on here about making sure you don't "waste" the taxpayer's dime.. but honestly, you got to do what is best for you and your daughter.

Ideally, somehow, she can go in-state (maybe CC for the first two, and then transfer for last two? to save on both tuition and housing) and only take out Federal loans. I know the interest rate on these currently are somewhat ridiculous (maybe less so, given there is no collateral, except for future earnings) but when it comes time to repayment, they are the most generous and she may be one of the last ones in her cohort that are still allowed to have the remaining balance forgiven after 20 years (10 if in public service).
 
I should say remaining balance after 20 years of "only" paying 10% of earnings minus the federal poverty threshold. What this equates to is thusly: say a salary of $50,000. Subtract federal poverty threshold ($19k) and then multiply by 10% to get annual repayment... roughly $258 a mo/ for 20 years. (50-19=31k * 10% / 12 mo's = my answer). This is basic math, but they never quite tell you what you're on the hook for when you sign the entrance counseling. Lower salaries than that pay substantially less per month. Its really not a bad deal.
 
:oops:
Also get ur daughter applying for scholarships, from all kinds of sources. My youngest just graduated from U Dayton and we are proud that both sons now have no debt. Made possible by the extra $29k of scholarships that the youngest got for his last 2 years.
 
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I put 2 through, and 1 is still in.-- Its tough. No loan recs, except try to get subsidized loans (lower interest rates) vs non federal unsubsidized loans
Other things must "give" as well,- -we have not bought a new car in >10, and have bought quality used. Many things like this will help. Good luck, its tough on the middle class.


Any equity in home? How many live in home? Sell home move to smaller, or apartment?
 
Allocate all or a portion of the amount spent back to the kids who are now working. They can help their last sibling go to college.
 
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Allocate all or a portion of the amount spent back to the kids who are now working. They can help their last sibling go to college.

This is good, but it's probably tougher to spring on the older kids retroactively. My dad was great at financial planning and worked it out so both my sister and I came out with almost exactly the same amount of manageable debt (4 year age difference).

It was the opposite for my wife. She came out with $40k+ in loans while her mom continually borrowed against the house to pay for her two younger sisters (claiming that the youngest wouldn't graduate if she didn't pay). It was a tough pill for my wife to swallow at first but we paid it all off and she has an awesome credit score while her sisters both have zero credit history (even though one actually is paying her mom back somewhat but isn't getting any credit for it from the credit bureaus).
 
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After 8 years of college for kids, need some advice on loan options for last one. Out of money. Looking for recommendations for loans for last daughter. Thanks in advance.

ROTC an option?
 
The first point of advice: Be careful.

  • Absolutely do not get into private loans to makeup the difference between cost of attendance and what federal loans cover. These loans, no matter what, are just not worth the headache and exorbitant (often variable) interest rates during repayment
  • It's been my professional experience that students who are well aware that they have a stake in repaying their loans make (subjectively) more prudent judgements about where to go to school, what to study, and how much a loan will cost (per month) to pay back.
  • Never take out a questionable loan of any type with the intent of saying "oh, I'll pay it back myself later". Life happens and has its way of getting in the way.
  • Investigate Parent PLUS loans.
  • Work with the intended school's financial aid office to see what, if any, institutional scholarships are available now and in the future. Going along with this theme, your child needs to apply to any and every scholarship available.
  • Above all, to bullet #2, educate your child about this. If she needs loans, make sure she understands that paying back this loan will cost x dollars per month, pulled out over y years with interest, means a payment of z dollars per month for 10-20 years.
 
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I'd ditto someone's comment about applying for scholarships, but I'd point out to really dig for them.

It was many years ago, but the Penn State local alumni chapter I was affiliated with at the time struggled to get very many applicants for ours. Sure it was "only" in the $500-$1000 range, but every bit you don't need to get a loan for helps. There are lots of obscure scholarships out there if you take the time to find them.
 
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At our church (in Central Ohio) lots of the folks are sending their kids to the community college for the first two years. This was helped by the fact that the legislature required that a credit anywhere counts the same, if it is a state school of any kind. So you don't get the nonsense you used to where a kid would go for 2 years and only get a partial year of credits at the big state U. tOSU is also starting to require that students live in the dorms their first two years, and that's another added expense a lot of families would rather skip.

Personally, I did my first two years at Ogontz (as did my sister but not my brother). That helped a lot--didn't hurt though, that tuition was $1K for those two years (this was 1974) and I got a scholarship. I think the education was better--at least you had more contact with profs in most cases. Freshman chemistry was still in a big lecture hall, though.
 
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There's no shame in working your way thru college, nor is it a parent's obligation to fund it. Personally, I started off with some scholarships, became an RA for one year, worked evenings for 84 Lumber, and then accepted an ROTC scholarship. My son is starting a program with UPS here in Louisville, which is a partnership between UPS, the University of Louisville, and the state of Kentucky. The student works Mon-Fri nights for 4-5 hours per night (third shift) unloading overnight packages from planes. As long as they maintain a "C" or better in their classes, UPS pays full tuition at UofL, plus they are paid $10.10/hr plus bonuses. Perhaps there is something similar in your area that your daughter could get into.

I would highly recommend avoiding private loans, PLUS loans, etc. Too many kids are funding their education that way, and as a result they have what amounts to a mortgage payment hanging over their heads the day they graduate. Much better to stretch it out an extra year or two and cash flow it by working, etc.

Good luck. I've been down the same road. Two in college now, and the third will be there next year.
 
After 8 years of college for kids, need some advice on loan options for last one. Out of money. Looking for recommendations for loans for last daughter. Thanks in advance.

I feel for you. College tuition is like buying a new car every year, with no trade-in to offer. Not many folks can handle 12 years of that, even with a lot of advance planning and investing.

Lots of good advice offered in the thread. I'll just amplify a few things:

1) have your daughter have some skin in the game. and go over this with her, so that she appreciates the situation. Most kids at 18/19 have no real sense of money, so don't stop with just 1 conversation, as she'll probably say the right things but won't grasp what you are saying. Depending on your financial situation, you can make a few deals with her. If you think you can afford it, you can promise to pay the loan if she attains a 3.5 GPA in the semester. Or, you can indicate that if she graduates, you'll assist with the repayment. Or, you can say nothing, and then evaluate your situation in 4/5 years to see if you can help her.
2) contact the college. they will instruct you in how to apply for financial aid. In most cases, that starts with filing a FAFSA form with the Federal Govt, and the equivalent form for your home state. You'll need to do this pretty quickly for the fall semester. Depending on your financial situation and the college/university to which she's going, the college/university may offer you some assistance. Don't be surprised if most of the money is in the form of Fed. Govt. loans to your daughter, and loans you can take out. The federal loans are the best ones out there (in terms of loans) If you take out loans (which I recommend), you'll have the option to start paying them off right away, or of deferring the payments until your daughter graduates. Only you can determine which option is best.
3) I believe in the FAFSA application your daughter will be asked if she'll accept work-study as part of the aid package. Be realistic about your daughter. If she's disciplined, this is a good option. If she's not, then the work-study may come at the expense of studying. Then again, every little bit helps, and work-study is a very direct way of having your daughter get some skin in the game.
4) if the package (including loans) that the college/university offers is not enough, call them back. They generally try to work with people. Sometimes they'll find additional money for her. Sometimes they'll offer a more relaxed payment schedule. There's all kinds of options. Be persistent, but not obnoxious, in your conversations.

I concur with the advice to avoid paying for college with commercial loans, or with home equity loans, if you can avoid those routes. However, if after submitting a FAFSA and working with the college/university, you may have no other option.

A few other thoughts assuming that you get past the above with a viable solution:

1) don't force your daughter into a particular major. That said, work with her, encourage her, etc. to pick a major that has a very viable job path
2) have a discussion with your daughter about next summer. She's going to have to earn money to assist with the situation. The ideal situation is to have her do an internship each summer in her career path. That's hard for freshmen, especially those that don't have a major, but if she knows she has to do it then she might be motivated to find such a situation. (Check the college/university web site to see when they have job fairs. That's a great way to find an internship.)
3) it's way too late to look now, but start searching for scholarships that she can apply to in future years. Don't pay for a service -- just do research. Alas, a lot of them are focused on high school seniors,so you'll have to wade through a lot of stuff
4) have your daughter apply for scholarships with her college/university each year. The process varies, but often they are a great source of scholarships for upper classmen, but you often have to be proactive to get them.
5) have a serious talk with your daughter about expenses during the year. Sororities are nice, but they cost a lot. Spring break trips are nice, but they cost a lot. Eating at restaurants off campus is nice, but you/she are already paying for a meal plan, so you're already paying for meals. I could go on, but you should get the sense. Basically, she needs to understand what her budget is at college, and that expenses above that are on her.

I wish you the best of luck.
 
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ROTC an option?

Very good point. My nephew just finished med school. He had a full ride to w&j pre-med then got into Air Force ROTC for med school. ROTC actually paid him enough for living that he saved money while going to med school.
 
The only challenge with work-study for me was getting enough hours to balance my allotted funding. It pretty much fell short, though I had two good jobs (one as an operator at a computer lab which was running old DEC PDP-11's and the other in the Nutrition Library). But I was able to add a job as a TA for a chem lab my last term, which also helped (not work-study).
 
Not sure of your family situation, but my brother and I have had loans from my parents for many years. Helps us save as it avoids loan fees, paperwork, credit checks, etc. and most importantly has given our parents a steady safe return on their money much better than any savings, money market or cert of deposit. It's deductible for us (it's on our homes) and reported as income by my parents.
 
Very good point. My nephew just finished med school. He had a full ride to w&j pre-med then got into Air Force ROTC for med school. ROTC actually paid him enough for living that he saved money while going to med school.

One of my HS buddies got into the PSU-Jefferson program. He'd been J-ROTC in HS, and so he took the Army offer--and was commissioned (and drawing 2nd LT's pay) after he "graduated" from PSU, which came after his second year at Jeff. Nice deal.

By the time he did his residency, etc., he was almost done with his service obligation.
 
While @ PSU (early to mid 90's) I was working in the student computer labs. For the most part the hours were flexible, the pay was decent. They limited one to no more than 20 hours a week.

There were two positions, one which would 'man' the lab for X hours (answer questions and help out new students) while doing homework. This was great because if you had a break between classes out in West side of campus, you could just sign up for one of the labs out there and 'work'.

The other position was a 'rover' type where you would go from lab to lab fixing hardware issues. This was less desirable, since you couldn't really get any work done, and you had to go out in the cold during the winter months.

During my last, as more and more students were bringing personal computers and laptops to their dorms, they created a new position where in two 'techs' were responsible for supporting one entire dorm building. This was great because you were given free room well they paid for it!

Between those gigs I believe I saved nearly $5k (during my 4 years and two summers) and paid for all my books, and had my own drinking money!
 
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