Researching student loans, wow my head is spinning. Any info?

[ruadisneyfan2]

Were you looking at whole life? Term insurance should only be a few dollars per month (especially if you are only looking for a death benefit amount to cover the loans).

No.
10 yr term that would have covered what the total amount of loans would have been, had he not switched to community college, which was a LOT.
This is why we chose the federal Stafford/Parent Plus loans.

 

[LuvOrlando]

So I just got my bill for Penn State 2016-2017, it's less than I expected so that's good... Diving in the loan stuff now & going to reread recommendations. Akk nervous


1) I did get a home equity line of credit as a buffer- allowing me to reduce monthly expenses if necessary as we go through transition.

2) I am now working full time so that's new unattached money coming in

3) Need to pick a loan entity to allow for wiggle room, not sure who yet but I just got the bill today

Anyone else doing this now? Curious about other people's experiences. A friend just paid for the whole year up front out of home equity & will pay it off that way... Not sure if that's a good fit for me but I can't say yet.

Since I'm working now I won't be back for a bit lol

 

[Judique]

So I just got my bill for Penn State 2016-2017, it's less than I expected so that's good... Diving in the loan stuff now & going to reread recommendations. Akk nervous


1) I did get a home equity line of credit as a buffer- allowing me to reduce monthly expenses if necessary as we go through transition.

2) I am now working full time so that's new unattached money coming in

3) Need to pick a loan entity to allow for wiggle room, not sure who yet but I just got the bill today

Anyone else doing this now? Curious about other people's experiences. A friend just paid for the whole year up front out of home equity & will pay it off that way... Not sure if that's a good fit for me but I can't say yet.

Since I'm working now I won't be back for a bit lol

We are. Sort of.

My daughter is transferring to University of Maryland after doing an associates at community college.
However, since she finished the associates 3 years ago and continued to work at her school, her fafsa does not include me. I was on pins and needles waiting for her to get back to school and get this done before I retire, but she makes her own decisions.

She saved quite a lot of money. I also have quite a bit in her original college fund. So there is no real stress, but still I like to know as much as possible and I like to have backup plans.

She will live at home and drive to school and work, continuing to work for the college with reduced work hours.

So her expenses are less to begin with and our (hers and mine) savings will cover the tuition easily.

 

[LuvOrlando]

We are. Sort of.

My daughter is transferring to University of Maryland after doing an associates at community college.
However, since she finished the associates 3 years ago and continued to work at her school, her fafsa does not include me. I was on pins and needles waiting for her to get back to school and get this done before I retire, but she makes her own decisions.

She saved quite a lot of money. I also have quite a bit in her original college fund. So there is no real stress, but still I like to know as much as possible and I like to have backup plans.

She will live at home and drive to school and work, continuing to work for the college with reduced work hours.

So her expenses are less to begin with and our (hers and mine) savings will cover the tuition easily.

What a great arrangement!

 

[sk!mom]

There is something implied here that you aren't stating, but I'll state it outright.

Most major programs have coursework that starts your Freshman year that is a pre-req for courses you take your Sophomore year, so that you can take upper division coursework your Junior and Senior years. So while completing your general ed requirements at a Community College is awesome, you probably won't complete your Bachelors in two more years if every course required for your major is required to be taken from the school granting the degree.

Some of the courses required to graduate may only be offered once a year - I had one only offered once every other year. If you missed it the year you needed it, there was no way you were going to get around a fifth year.

So you may need to spend an extra year in school, or take some Summer coursework.

You explained this so well, I feel like I need to save it for the next time this topic comes up. Community College is a good choice if a student has no idea what they want to do and needs more maturing time, it's a great option if it is an affiliated program with a University so that you know everything will transfer, and it's a good idea if the student needs to work and save some money for the remaining University years. Just go into it knowing how it will transfer.

My DD20 went straight to a University, and just as you stated, started courses toward her major immediately. Her core classes are spread out over the 4 years. It would be very complicated for a student to come in as a Junior. They would have all of their core classes but would be missing so many prereqs that even filling a full-time schedule would be a challenge.

Also, many Universities give the majority of their merit aid to incoming freshman. We definitely took that into account, as well.

So I just got my bill for Penn State 2016-2017, it's less than I expected so that's good... Diving in the loan stuff now & going to reread recommendations. Akk nervous


1) I did get a home equity line of credit as a buffer- allowing me to reduce monthly expenses if necessary as we go through transition.

2) I am now working full time so that's new unattached money coming in

3) Need to pick a loan entity to allow for wiggle room, not sure who yet but I just got the bill today

Anyone else doing this now? Curious about other people's experiences. A friend just paid for the whole year up front out of home equity & will pay it off that way... Not sure if that's a good fit for me but I can't say yet.

Since I'm working now I won't be back for a bit lol

1. A home equity line of credit would be a no go for us.

2. Since you weren't previously working full time, can you just use your entire salary and cash flow college? That is basically what we have done.
We have also curtailed vacationing while she's in college to avoid depleting savings. We would prefer to sacrifice a bit and tighten our budget rather than have anyone take out loans. Three semesters left to pay since we just paid this fall- fingers crossed!

To further make this work, DD has a part time job which covers her gas and spending money. She also covers half of her sorority expenses.

DD also knows that maintaining her grades to keep her merit scholarship is imperative. She has done a great job as it has renewed again for this her third year. Just one more renewal!

3. We are using savings as our wiggle room. I haven't read the whole thread- Do you have any savings that could go toward school? Even if that isn't what it was earmarked for?

 

[NotUrsula]

There is something implied here that you aren't stating, but I'll state it outright.

Most major programs have coursework that starts your Freshman year that is a pre-req for courses you take your Sophomore year, so that you can take upper division coursework your Junior and Senior years. So while completing your general ed requirements at a Community College is awesome, you probably won't complete your Bachelors in two more years if every course required for your major is required to be taken from the school granting the degree.

Some of the courses required to graduate may only be offered once a year - I had one only offered once every other year. If you missed it the year you needed it, there was no way you were going to get around a fifth year.

So you may need to spend an extra year in school, or take some Summer coursework.

Yep. One of the gotchas is that students who are at the university have access to online planning tools that lay all this out, but if you are at a CC, you normally won't be able to use it. The one my son's school uses is called DegreeWorks. It is set up to show all of the courses you will need to complete for your major, minor, and area of concentration, plus all state and university exit requirements, and it checks them off as you complete them. It also includes planning scenarios that show what will happen in terms of credits if you change your program.

I would say that anyone who is planning to go the CC route and is sure of which school they will transfer to should get an appt. to see an academic advisor at the university and and find out just what courses will be required, and which ones will have to be taken in-house and in-order. After doing that, many students find out that their time at CC will have to be limited to one year, not two.

Another money-saving option at many places is taking advantage of CLEP testing if it is accepted. (Details will be on the university website.) My DS managed to shave off a semester that way, at a total cost to us of under $400.

Also, FWIW, I advise against taking out PLUS loans. You never know what the future holds, and you cannot borrow for your retirement. If debt is to be taken on, the student should be solely responsible for it.

 

[Rhie]

Go to your school financial aid office. Penn State has a huge office, and they can help you. Definitely continue to follow up though.

Go to www.fafsa.gov first, and fill that out if you haven't already. Then your school will send you an award package, including loans and grants.

Go to www.studentloans.gov to look up specifics about your loans and sign the promissory note. The school can guide you on how to do this or you can use the online wizard.

If you want private loans (which...why?), then go to local bank and ask about your options. I suggest PNC as they are super helpful and have free check accounts for students. Good luck.

 

[Judique]

What a great arrangement!

Yes, it's been wonderful! Since she was/is an employee at the community college, a large portion of her tuition was covered also, allowing her to save her earnings.

BTW, I am impressed by your diligence in getting all these insights and collecting all the financial information, as well as getting a job to help your children with the expense. For me, I just want to work a bit longer to be sure that the bills are met each semester out of our regular budget. Now that I've grown the nest egg I almost want to keep it as long as possible and try to keep the tuition paid without touching the money unless we have to. Univ of Maryland I believe is considerably less expensive so easier for us to begin with.

 

[Solid Snake]

Sallie Mae is a fine service. Most the people who dislike Sallie Mae simply do not understand the terms of the loan at the time of the agreement. They never acted outside their contractual agreement with me,

 

[Pea-n-Me]

Re community college transfer programs. Like many things discussed here, there can be regional differences.

MA has a good program called Mass Transfer.

http://www.masscc.org/transfer

As long as one enrolls in the program, there are matriculation agreements between community colleges and state universities; and now, even some of the private colleges. With most programs, the maximum number of additional classes one would have to take at the baccalaureate school is two. (I think there might be a couple of programs that may require more, such as nursing.)

So as long as one has some idea of which track they'd like to take, it should work out.

(And not knowing which track they'd like to take, or switching majors, can happen anywhere, effectively prolonging the program of study either way.)

 

[LuvOrlando]

OK so for those parents who are interested & whose families are following mine here is my plan constructed with escape latches & safety valves.

First, we started saving a while ago and have been able to put away roughly half the amount for college in cash in our states 529. I know there are probably more productive investment vehicles but in my opinion this one is relatively safe ( risk accompanies profit) and the fact that it saves me state taxes during a time when savings account interest rates are so low makes me feel that it's at least negative loss savings Lol.

The second half of tuition we always expected to pay out of income. As a buffer I decided to get a job over the summer in advance of my son going off to school & so my income will roughly be equal to the monthly payments for my son this year and both my daughter & son next year.

We paid cash for his summer classes and spent this summer time working on upping our credit ratings ( which I had been admittedly neglecting because once I had a house I sort of started ignoring it - Not a fab idea) - and so we were able to get a great rate home equity line of credit. It was my original intent to just leave it there as a buffer but since I now understand how they work a little bit better I decided to drop a high interest-rate card into it and pay down the principal much faster which correspondingly opens up available credit. Everything should be zeroed out in a couple of months and it will function the way I want as a buffer going forward. With this I really really like the idea of having a safety net, of being able to shift amounts due from ParentPlus into home equity and pay it off over a really long time without needing to time the application process in accordance with whatever catastrophe might come our way... Life happens .

My son took out the Stafford loan portion for himself and I plan on paying his interest. Going to do the same thing with my daughter.

My husband & I took out the parent plus loan as another buffer and we set it to be deferred till four years after he graduates. The beauty of this is you could set the term out as long as humanly possible and then do whatever you want without penalty. I actually expect to pay this off with the cash and my income but since I really want nothing to do with risking us overextending ourselves this sets the minimum payments as favorably & low as possible.

Oh and one more thing both my sons Stafford loan and our direct parent plus loans are with Nelnet - I hope I like them we're going to get to know each other pretty well.

If anyone else reading this has come up with an interesting financial plan for college I'd love to hear about it, I would love to hear some improvements and tweaks are always welcome

You know what's weird with all the books I read for financial plans for college not one of them actually gave me anything like the plan I came up with - I wanted some kind of a blueprint to navigate the process and all I got was confusing circles of information but no information on how to harness was available to us to protect us. Pretty much I would think this particular sort of arrangement would work regardless of where you're sitting on the college cost range. Half cash half out of payments with a credit card open or something like that to take on the expense if things go sideways

One more thing the parent plus loan says they won't come due for 60 days from when I signed the document. I don't have a loan number yet or anything to make payments with but I'd kind of like to get started as soon as possible so I'm not losing any more interest than necessary. I'll come back in a few months once I've made a few payments to say and how it's going. I really wish I had come across a parent wanting to do this last year for me

 

[J'aime Paris]

Thank you for the update Luv Orlando!

Our DD is a senior in HS, so we are formulating our plan for next year. We are choosing to keep DD debt free. We are not eligible for any financial aid, unwilling to take out loans, and it's possible she can win a few merit award dollars.

1. Pay the tuition outright. This will probably come from money we have in savings for retirement. DH will need to work a few extra years.
OR
2. Purchase a lake home, which will become our permanent "downsize" home. Sell our current home, and use the profits to have zero mortgage. The lack of mortgage would free up the money to pay for her college.
OR
3. Win the lottery!

 

[teller80]

[QUOTE="J'aime Paris, post: 56430806, member: 184308"1. Pay the tuition outright. This will probably come from money we have in savings for retirement. DH will need to work a few extra years.
OR
2. Purchase a lake home, which will become our permanent "downsize" home. Sell our current home, and use the profits to have zero mortgage. The lack of mortgage would free up the money to pay for her college.
OR
3. Win the lottery![/QUOTE]

This is probably not a good plan, you'll have to pay taxes and a penalty on that money. If you withdraw $20,000, your taxes would be about $5000 (don't quote me on that) and your penalty $2000. Best to speak to a financial professional before you go that route.

 

[J'aime Paris]

[QUOTE="J'aime Paris, post: 56430806, member: 184308"1. Pay the tuition outright. This will probably come from money we have in savings for retirement. DH will need to work a few extra years.
OR
2. Purchase a lake home, which will become our permanent "downsize" home. Sell our current home, and use the profits to have zero mortgage. The lack of mortgage would free up the money to pay for her college.
OR
3. Win the lottery!

This is probably not a good plan, you'll have to pay taxes and a penalty on that money. If you withdraw $20,000, your taxes would be about $5000 (don't quote me on that) and your penalty $2000. Best to speak to a financial professional before you go that route.[/QUOTE]


This portion of our retirement money is in our own personal savings account. It is not subject to any fees.

 

[HeatherC]

Another option that it doesn't seem like many people even consider is....stay local and live at home and pay out of pocket. I realize not everyone lives near a college, but most people I know automatically think their kids HAVE to go away to school...even if they can't afford it.
My DD is a sophomore in college at a one of the Massachusetts State Universities. She is living at home and was awarded a couple scholarships her freshman year and just received two more this fall. Her tuition bill for this semester for 17 credits of classes was $3,251.00.

My point is that it DOES NOT have to cost an arm and a leg and these kids do not have to come out with student loans they can't afford to pay back.