So here’s the deal. I’m currently a freshman working toward a B.S. in electrical engineering. I expect to be here for 5 years, and the tuition is $23,000/year. Through financial aid + scholarships, I have $30k covered. After that, I’m on my own. Eventually I know I’ll have to start taking out loans because that’s the only option. I make $200/week through freelancing and am wondering what the best way to save that money is for my graduation. Is there a way to make that grow? I’ve tried looking at investing options but it’s just so unclear. Should I purchase savings bonds…? I don’t know what in the world to do.
Do you have financial aid and scholarships for that FIFTH YEAR?? Many schools will not provide aid for a 5th year…and many scholarships don’t cover a 5th year.
Wait, are you saying you have 30k per year covered or 30 for 4 years? Are you living at home?
As a student here are your borrowing allowances
Freshman 5,500
Soph 6,500
Jr 7,500
Sr 7,500
After that you can take up to 7,500 per year if you didn’t reach the limit but if you took loans every year you would just have 5,000 left to borrow. Unless the 5th year is an MS, then you have access to graduate school loans.
After that no one will lend you any. Parents can take plus loans. or cosigner on private loans if they have good credit. Is that what you plan?
It will be better to take less loans than save a bunch of money, unless it is subsided where you don’t pay interest. Are you just thinking to have some left for job hunting or what?
No I have 30k out of my whole college expenses paid for. So 30k for 4, not each year. I guess I made this kind of confusing. What I really meant by $23,000/year included housing and all of that. So in other words, if it takes me 5 years (which it likely will), I will owe 85k after that 30k.
You won’t owe 85K unless someone else borrows it for you. You won’t have savings for graduation because you will have to use your money to pay for college. Did you make a smart decision at college time? Why will you take 5 years? Why was your instate school inadequate considering your financial situation?
Why will it take my five years? Because getting an electrical engineering degree is difficult and there’s hardly anyone here who has completed it in 4 years. This is my instate school, I get a huge tuition cut. And yes I know I won’t have any because I’m planning on paying for college, that is why I am asking what the most optimal way to do that is. Obviously I can’t pay for it on $200/week, so what is the best way to save and grow that money to repay any loans I take out?
First of all, you need to not make it take 5 years. This is ENTIRELY under your control. You need a sit down with an adviser in your department to map out every single course you need to take, when to take it, and to get him/her to equalize your work load so you aren’t taking too many killer courses per semester. You need to graduate in 4 years.
Second, If you are borrowing money to cover your living expenses while you are generating income every week you need to not to that. Your earnings should be covering your month-to-month expenses if you can swing it, so you can reduce what you are borrowing. You will be in a better place long term with less debt even if it means no savings.
Third, you need to figure out if the work you are doing can be translated into more lucrative work down the road- summers, senior year, after you graduate. If it isn’t, pay a visit to career services at your school to get help on your professional goals and how to meet them. it’s great that you have a steady income, but if you can generate that income AND have “resume building” skills as you go, it will be very beneficial.
Can you live at home? Dorms and food plans are a big big bite of your problem.
Home is 3 hours across the state so unfortunately not. Wish it were a possibility.
How are you planning to get 23k each year? Does that already include a student loan in your aid package?
What we are trying to explain is that you can’t earn enough interest on savings to make it worth it. Meanwhile your unsubsided loans are accruing interest. The best use of the money is to reduce borrowing. No sense in earning a 1% interest and taking a loan at 4 to 8% or more. Just apply the earnings to the expenses you are borrowing for. That will save you the loan interest.
Okay, that makes more sense. I was hoping saving it would make a big difference, but looks like that’s silly.
My husband is an electrical engineer. It is absolutely possible to complete a degree in four years if you remain on sequence for all your courses, and pass them the first time around.
How was your first semester paid for?
Don’t forget about the income tax and self employment tax on your freelance income of at least 15.3%.
So what was your actual plan for paying after the first 30K, that will be after freshman year?