The understanding between my parents and I has always been that I would be paying for the majority of my college education by myself - which means taking on debt in my name. I was very lucky to receive a full tuition and fees scholarship from Tulane University. However, there is still the matter of the $13,000 needed to pay for room and board for the first two years, and a similar but slightly less amount required to rent a house off-campus the last two years. I have a job but my savings account is virtually non-existent after paying for college application fees, travel expenses, and recently putting down my deposit, so I don’t have much money saved up to use towards my bills. I will have a job in college, not sure if it will be a work study or not but regardless I will have an income. I have gotten a Federal Direct Subsidized Loan for $5,500 but what do I do to pay for the remaining $7500? I will obviously have to take out private loans… are there better places to do this than others (banks vs credit unions? other viable companies?). Does the fact that my parents will not co-sign on the private loan limit my options in any way? Which payment plan is the best - paying loans right away, paying interest but not principal while in college, or waiting on both until after college? Basically I am just looking for any and all advice regarding how a student should go about accruing debt and paying it off. Thank you for your help!
You will not be able to take out that extra $7500 all by yourself. Ypu will either need a cosigner, or your parents will need to take the loan.
Well then I’m sure that even if my parents must cosign, I will still be expected to pay the loan. They are willing to help out with small expenses here and there but can’t afford to do any more than that
That is the implication with a co-signer. You will be the primary person the re-pay the loan, and your parents would be asked for payment if you were somehow unable to make payments.
Right. I’m just trying to figure out in general what payment plans to consider - which ones are best for students who are paying themselves, and where to get the loan from. Also looking for any advice from those who have experienced the situation of paying for their own loans & taking on debt right as an undergraduate student or those who are knowledgeable about it.
Are you putting away money now for college from your current earnings? How much will you earn over the summer?
Room & board has to be paid to the school; if it is $13,000, then $6500 will be for fall semester, and $6500 for spring semester. Your student loan will cover $2700 of that each semester, leaving a gap of $3,800 for you to fill. Can you earn (and set aside for school) that much this spring and over the summer? A chunk of that? Can you earn money during fall semester and the early half of spring semester to pay for spring semester’s room & board? (Usually colleges let you make payments on room & board so that it all is not due at once.)
If your parents are not approved for a Parent Plus loan (have very poor credit & significantly delinquent accounts) then you can be approved for a larger federal student loan in your own name. Tulane might also have some Perkins loan funds that you could borrow.
Will your family help with money for any of your school costs at all?
@arabrab yes I am currently trying to save money now. I just graduated early from high school this week so I can start working 30-35 hours a week to save up money (albeit I get paid minimum wage, so it will not be a ton of money saved up, but it helps). I get paid $1500 total for 10 weeks at my summer job, so combined I will hopefully have somewhere near $3000 saved up by the end of summer that I can use towards college. I will be working and saving thoughout the fall semester (and for the rest of college as well), but once I’m in school I’m guessing it will be harder to save as much money as I would like due to extra expenses and the fact that I won’t be able to work as many hours as I do now.
My parents would be approved for a Parent Plus loan as their credit scores and financial history are fine, but they are not going to take out any loans for my education. The most they will do loan-wise is cosign loans for me (and even that they are very reluctant about and would prefer to not do, although it seems as if they don’t have much choice). They will pay for some smaller expenses (probably things like groceries, clothes, supplies, plane tickets, maybe books, and other smaller fees here and there) but the rest of the large expenses are on me.
Can you explain what you mean by Tulane might have some Perkins loan funds I could borrow?
The Perkins loan is a loan intended for families with a low EFC, and typically schools do not have much of these funds to give - it tends to be on a first come first serve basis. If anything, you could get an additional $1,500 - but with the likelihood of the government discontinuing this program soon, it is likely you might not be awarded it.
We don’t really have a low EFC (~$35,000/year). It’s way higher than what my parents could realistically pay for me but it’s not a huge deal since I recieved the full tution scholarship anyways. I’m assuming this would disqualify me for a Perkins Loan though.
Correct, Perkins would not be an option with that EFC.
One thing you need to keep in mind is that any loans you take to fill the gap are going to start accruing interest the day you take them out and will require repayment starting immediately. When investigating loans, make sure to understand what the payment would be not only your freshman yr, but your jr and sr.
You are in a difficult position. Are your parents unable to help at all? Could they take on the payments until you graduate and then you take over when you finish?
It seems very unusual that your parents have an EFC if $35k and they won’t help at all. Don’t they care if you can’t go to college for lack of <$10k?
@Mom2aphysicsgeek my parents would love to be able to pay for my college, but with their own bills and the expenses for my three younger siblings, they aren’t financially able to take on another loan. If they made lifestyle changes such as limiting my siblings to only have one extracurricular activity or not owning pets then they would be able to pay more but it’s not fair to my brothers or my parents to have to drastically alter their current lifestyle to meet my needs. They are trying to save what they can to be able to help me and to prepare for the near future when all three of my brothers will be in college too. Helping pay for smaller expenses becomes a much larger commitment when you’re doing it for four people. So, they can help with the small expenses here and there and I’m sure if I ever got in a pinch once or twice they would help me with my loan, but they can’t make regular payments on my loans, even when I’m still in college.
@Fergus3
Believe me when I say I can understand. We have 8 children with a large EFC. However, we do make different choices. Our kids do know that activities are limited or sacrificed in order to help meet the expenses of another. As a parent, I can’t imagine arguing for a pet’s expenses over one of my children’s college education, but your family has their own reasons for their priorities.
But, you are in a very bad predicament bc you won’t be able to make the payments for all 4 yrs. Tulane gave you a fabulous award and it seems a shame to not be able to attend such a great school for what in terms of your family’s SES cannot be that overwhelming of an amt.
In the current scenario, you are not going to be able to attend Tulane. If your parents don’t cosign and help with payments until you graduate, you won’t be able to fill the gap.
Do you have other schools that you can afford? It is really hard to imagine schools for less than what you’ll need to pay at Tulane. My current freshman is attending full-ride, but those situations are pretty rare. Our older 3 all required our paying a significant amt.
I’m sorry you are in this position.
@Madison85 while the EFC makes it seem like they could afford to pay $13,000 a year, in reality they can’t. Morgage payments, minor credit card debt, retirement savings - all that on top of the expensive responsibility of four kids. Trying to reallocate 10% of their paycheck just towards my college expenses would be very difficult. They will help with small expenses (not counting travel, a ballpark estimate of what they would contribute is probably somewhere between $1000-$2000, but it would be for extra things like books or living expenses - not for my loans). Of course they care and want me to go to college, but the reality of the situation is they (like most families) don’t have unlimited money to use towards financing it and they don’t want the college debt from four kids hanging over their heads - it would be crippling.
@mom2aphysicsgeek the only other school that is cheaper for me to attend is my state school, where I would be paying $10,000/year. However, with the opportunities that Tulane provides, I feel that spending an extra $3000/year to attend here is worth it and will pay off in my future. While I’m clearly not in a great position to be taking on extra thousands of dollars in debt, I think that Tulane opens doors for my future that my state school can’t which, when looking at the big picture, is worth it to me. You keep mentioning that I can’t afford to make payments for four years while I’m in college - I know that our credit union offers a payment plan where you don’t make a single payment until you graduate (however, this has a higher interest and a longer time period to pay off). Would this be a better option for me? I don’t know how well versed you are with all different kinds of loan plans, but you’re probably more experienced than me (:
You need a second job now. And getting $150 a week over the summer is ridiculous. You need twice that. Can you add in mowing lawns, babysitting, waiting tables. Have you applied for local scholarships? When your siblings are in college, your EFC will go down. Do you have grandparents that could help pay $500 a year for just the first year? You can’t get a loan in your name.
Speaking as a parent I can’t imagine not cutting back on the rest of the families wants (not needs) to deny my eldest college when the numbers are that close. We would forego extra activities, vacation and cut expenses. I’d probably even go deliver pizzas.
Rdtsmith…some people aren’t going on vacations, doing extra activities, and have little they can cut.
@gearmom @rdtsmith Unfortunately my eldest brother starts college the fall after I graduate, so the EFC will remain the same for me for all four years (assuming no changes in my parents’ employment or other circumstances). My family cuts expenses as much as they can already - like I said, they are still trying to pay for mortgage, credit card debt, and retirement savings on top of other routine bills. It’s not that they are spending money unwisely on frivolous things other than my education, it’s that they are trying to create the best quality of life for each of their children, and if they were to take on all of my college expenses, this would severely impact each of my brothers in a very negative, unfair way. I’m working 30-35 hours a week from now until the end of May, when I start work as a summer camp counselor which is 24/7, so I can’t take on a second job. I realize that I will probably get some heat for working such a low paying job when my financial situation is the way it is, but the camp is a much bigger part of my life than just a job, so it really is a non-negotiable aspect of my situation.