Happy Easter, everyone! Thanks so much for the comments and suggestions!
I may be totally off-base here, but is he interested in the military? At all?
Not at all! My youngest is obsessed with it, though, so we are hoping he will go that route!
Go work for the college/university where your son wants to go. I've heard some give discounted or free tuition to their employees' dependents
Very creative idea! However, I actually work for our local university and DH is planning to also retire in his job, it would be too costly to change at this point;, not to mention we would uproot the entire family to move to another state. It's just not feasible.
What's the major? And is it possible to get a master's (that's usually a 2 year gig) after a free 4 year at the state school?
My daughter has a very specific major choice that isn't at every school, but thankfully, is at many large state schools, so I get having limited options. But, she is adamant about wanting little debt
Illustration. He could get a master's, but I think he wants to just get the bachelor's and get employed! And, I would imagine that he will be very successful with just a bachelor's. We have lots of grad degrees in my family, so I'm all for them, but if can accomplish it all with a BA, then that is great.
My kiddo is sickened by the debt, and he enjoys architecture and engineering, which he could get at LSU for free; so, I am practically asking him on a daily basis if he could be happy with one of those, which would also use his artistic talents, but he is adamant that the debt is worth it to him. This has been his passion since being a toddler, so I just have to have faith that it is the right path, even though I will never get it!
Hopefully your daughter will have more financial options for grad school than she realizes. I had tuition covered and received an additional $12k/year to be a research assistant, so hopefully she will come across something like that!
Is there any way he can become a resident of that state where he will be attending? Is there an in-state rate?
See if his school offers any Federal Work Studys jobs. They are on campus jobs that work around the students schedule and they can usually have some imput as to what the job is. It may be things like working in school library, the information desk, working in a department, etc. Nothing strenuous.
Lastly, he's going to need to get a job. Our daughter is a freshmen this year and about a month after school started, she got a weekend job. She works doubles on Sat and Sunday.
No, it is a private school (and I did look into all the loopholes with that, too). He was offered $1k/semester in work study and will definitely take that, and we will see about the course work load and an additional job once he gets acclimated. He will definitely work summers, including this one!
The maximum amount of Federal Loans he can get is $27,000: 5,500 Freshman year, 6,500 Sophomore year, and 7,500 Junior and Senior Year.
Yes you can put money in the 529 and then take it back out to pay tuition. I've done this with all my kids, kid 3 starting college in Fall. I put all their graduation $$ in the 529 then send a check from the 529 account directly to the college for fall tuition. I then get a break on my state taxes in the form of a credit for my contribution.
Not sure of your income level, but we qualify for the American Opportunity Tax Credit:
https://www.irs.gov/credits-deductions/individuals/aotc
Good luck on your journey, I know how stressful it is, but it will go fast
Thanks so much, this is exactly the info I was looking for! We should qualify for the deduction, so that is nice to know, too. I'll leave $4k out of the 529 and pay that directly and dip the rest in. Every little bit helps!
I see from the other post that we are talking about art schools -- that's a tough one. I'm not sure if he's already committed to one (sent in a deposit) but if not, it might be possible to negotiate with/ask for a reconsideration from the financial aid office at his first-choice school. Even if he's already getting the max in merit aid, there might be some special grants (such as for summer research) that could be added to his aid package.
Yes! He sent them an email and they said they will send it to the "appeals" department and get back with us. I doubt it will be much more, but every bit helps. His second choice school sent him yet another scholarship this week, so he has not declined that school yet (or accepted this other one) until he sees what happens with the appeal.
Has he talked to his Guidance Counselor? Explored other scholarships not from the college? Grants?
Yes, and they are all so oddly specific! He applied to a lot, but they are all small awards and have many thousands applying to them. The school offers more for upper class, so he will continue to apply for more at the school as he qualifies for different ones. For example, they can volunteer at the school's program that brings the arts to impoverished children and get a scholarship (and he would do the volunteer work regardless). I'm also hoping he can get an RA job, but I am not sure how competitive that is. He is very responsible and great with conflict management; he is also very personable and funny, but he is not extroverted like most RAs are.
We used Parent Plus Loans to bridge a gap in our son's College costs. The backup was the equity in our paid off home. Never had to tap into that.
But before we ever had kids we decided we, not they, would pay for their college because that was what we felt was best for our family to be.
As soon as we find out the exact amount, I'm going to check into the PP loans, but the rate really concerns me!
By now you should have received his financial aid package from the school so you know whether he received any need-based aid in addition to the merit scholarship he was awarded. The work study someone mentioned would be part of that, as well as any grants. That tells you the total amount you need to come up with.
As someone else mentioned the student can only take out $5500 in loans himself. Anything beyond that needs a co-signer. For the student loan, if you have financial need he may qualify for a subsidized student loan, where the govt pays the interest while the student is in school. If he only gets an unsubsidized loan then the interest accrues while in school.
One of the schools my kid attended offered a monthly payment plan through an outside company. You could pay monthly rather than paying in full upfront at the beginning of each semester. That can be helpful if you are paying out of cash flow/current earnings. Of course there was a fee for this but it wasn’t much.
Congratulations to your son and best of luck!
Thanks! After we hear about the grant/scholarship appeal, I am going to call and get more info on the package they sent. The federal loans don't add up to $5500, so I guess that means we aren't eligible for more? They also have a monthly payment plan, and there is no charge for it, so maybe we can do that for some of it.
Another poster suggested that $27k is the max, but that is for federal Stafford Loans. Private Loans can be added to that and bring the 'available' financing in your child's name to a much bigger number, but the private loans will likely require a co-signer and will carry higher rates than the Staffords. Any private loans requiring a cosigner will affect the co-signer's credit rating and count against their total debt outstanding.
It's hard to pay for many schools nowadays with normal savings...six-figure total tuition and fees, room and board, are the norm. We used Parent Plus loans to cover a good chunk of our daughter's schooling for the flexibility in payment terms and the ability to get large sums, as needed. They are not for most people, but we knew ahead of time that we had the means to pay them off. Directing the proceeds to the school meant we never needed to worry about payment deadlines. It was a seamless and easy process.
We certainly have not ruled the PP loans out, but I want to do the math when I have the exact specifics. What I would like to do is for him to get the max loans (federal and private, and we are happy to cosign), and then we can help him to pay them back, even starting while he is in school. I want him ultimately responsible for it all just in case something happens to our ability to pay (I cannot imagine this will ever be a problem, though), and that way everything that we do to help him- which will hopefully be a considerable amount- will just be a bonus.
Sounds like I'm probably in the minority, but I would use the money you have put aside for the retirement home. I am on the parents should largely pay for college train (that's the legacy in my family, I know it's not in others - to each his own), but am adamantly opposed to any loans for college unless you just don't have any other options.
Everyone I know who's purchased a home intended for retirement "someday", but rented it out in the meantime, ended up regretting the decision. It's a hassle finding good renters, they put significant wear and tear on the house all those years, etc. Once retirement came, they either ended up selling the house and buying another because their needs/wants changed, or they had to do significant renovations to fix rental damage and get it into the state they wanted for their permanent home.
So I'd just use that savings for your son's college, then start re-saving to purchase something when you actually hit retirement.
As far as funneling that money into your 529, that's something you really need to work with people who know your specific state's tax laws with. What the benefits are varies significantly from state to state. My understanding is that Louisiana has much better tax incentives than mine (California - they don't have squat for tax benefits except it grows tax free). I grew up in LA and my family still lives there - my brother and I were discussing 529s at Christmas, and I know he still contributes to my nephews' 529s even though they are already in college because the tax benefits are so good. I stopped contributing to my daughter's (also in college) a couple of years ago, and will just use my investment accounts to pay anything that exceeds her 529 now because it's not worth the chance of having too much in her 529 and getting hit with penalties to withdraw it, and other than some small amount of tax-free growth there's no great benefits for me there.
But as someone else mentioned - check to see if you are eligible for the tuition tax deduction. If you are under the income limit, it basically works out to getting back $2500 on $4000 of QUALIFIED expenses each year. But that money needs to come from your loans, savings or cash flowed, it cannot come from 529s. (If you don't know what qualified expenses are, it's time to start Googling that
- it impacts both the tax deduction, and what can be reimbursed from your 529, although what is considered qualified varies a little between them. My daughter's non-qualified fees exceed $1000/yr, and she's at a cheaper state university and lives at home - so be sure to have a plan for how to pay them. The school should be able to give you a break down of what portion of their fees are qualified vs. non-qualified)
I know this is all overwhelming. It took me most of DDs senior year in HS to figure it all out - just take it one step at a time. Once I had it all down, I realized I was in much better shape to handle it financially than I originally thought. But planning and detailed record keeping is key.
Before I posted this thread, I asked DH how much he still wanted the cabin, and he said 7 on a 10-point scale; I think I am probably at a 3-4. So, this is definitely the way I'm leaning. I will definitely first maximize the tax credits though. It is completely overwhelming and sickening. I have peace with it being the right direction for him, though, so I will soon have peace with the finances, also. Everything always works out, this will, too!
Thanks again for all the advice!
