These limits are for federal loans. If the parent is willing to co-sign, the child can take out private student loans. Interest accrues from the date of disbursement but payment is deferred until the child is out of college. We are paying the interest on my daughter's loans while she is in school but she gets the principal when she graduates (unless we win the lottery between now and then!)
Yes, but you as the co-signer are ultimately responsible for the loan if your daughter for some reason cannot pay her loans, and they have hefty fees and interest rates. I don't think most kids have a a full understanding of just how onerous it is to pay these loans back with a beginning salary, and, for many of them, relocation, a car, marriage, homes, children, etc. I ran a few numbers through the calculator on the FinAid site (GREAT source of info, btw). I put in the standard cumulative amount of Stafford loans for 4 years ($27000) at 4%. The interest may be higher; I just can't remember right now. Also, on the unsubsidized portion of the loans, if interest hasn't been paid by the student while in college, the interest will have been caoitalized and added to the loan amount, making the $27000 even more. The payment on just $27000 for ten years will be about $273 a month, requiring a salary of $32,800 to comfortably pay back this amount. Add the private loans to that, which are likely to be at a higher rate, and you're looking at a serious chunk of change. That's why I think it is almost better to tell a student straight out that it's public in-state or nothing if the parent
won't finance the rest. If a parent
can't finance the rest, as determined by the FAFSA and/or the Profile form, THEN the aid MAY be higher, depending on what percentage of need the college typically covers. My point is that if a parent CAN afford to finance more than a public education, but CHOOSES not to, they are putting their child in a tough financial spot as they start out their lives after college, and in my opinion, in this particular case, they should just say "honey, you have to go public."
That question - can they finance the difference - really depends on the package the student gets from the private school as well as things like scholarships. It isn't unusual for private schools with good endowments to wind up cheaper than the public school.
If I could pay $20k per year for "State U" and my child really wanted to go to "Ivy" at $50k a year, I would strongly caution her against taking on $30k per year of debt (she'll be eighteen, by strongly caution that would be "I ain't co-signing"). But if the package from Ivy got the cost of Ivy down to $25k a year, that $20k they'd put towards that MIGHT be a good investment or just a worthwhile expense.
Yes, but I think what everyone is missing here is that
the pkg. is first and foremost dependent on the parents' income and assets, and secondarily on the student's assets. BTW, the colleges will expect a much larger portion of the student's assets to go towards college. Even at the ivies, the majority of which meet full need, they are not going to give you more than what they perceive to be your need. There are no merit scholarships at the Ivies. And the Ivies are one of a very select group that pledge to meet full need. Swarthmore goes one better--they pledge no loans. But, in most cases, if a college thinks you can pay $30000 a year, that is at least what you will be paying. In real life, it is often more, because most colleges don't meet full need. For a CSS/Profile school, it's often even worse, because they consider assets that the FAFSA does not.
I know that
some privates will meet full or nearly full need---my daughter is at one of them. That's one of the criteria we used when we looked for schools. Check out the Princeton Review's Financial Aid Honor Roll for a good idea of what schools meet most of a student's need. (Her school was not on it last year, but I think it was the year before---if not, definitely the year before that). That's the key to finding a school that will be as inexpensive as a public--they meet full need.
Also, as far as outside scholarships, privates handle them all sorts of ways. A very few will let you stack them on their aid. Most will either use them to either replace loans or replace aids such as grants that the college has awarded. My daughter got some scholarships after her financial aid was calculated, and we were obligated to report them. As it turns out, the college replaced some of her loans with the scholarship money (a good thing, since she won't have to pay them back) and took away her work-study. At first, I was upset about that, bur ultimately it turned out to be a good thing too. Another little gotcha that people don't realize that if a student is granted $2000 in work-study, it still has to be paid upfront as part of the tuition bill. Most students who earn the money during the year use it as spending money. And, as it turned out, her school does not reserve on campus jobs first for work-study students, so she hustled and found herself a campus job right away. Other schools reserve jobs for work-study students first, then open them up to other students. Or, worse yet, they don't have enough jobs to go around. Just because you're "granted" work study doesn't mean you will be able to find a job. Or, as in the case of the school that "awarded' her a very large work-study amount, she would have had to work a ridiculous number of hours to reach that amount.
I hope this info helps people in the planning stages. I did a LOT of research over the last year and a half, and I'm still finding things out.
It was a University of WI campus. 
