I am not that well versed in college loans at all, honestly, bc when we investigated them with our oldest, we refused to go that direction bc over 8 kids it would have financially devastated us.
But, is that credit union going to give you the loan without your parents consigning? You said your parents refuse to cosign. It is pretty hard to imagine a private bank giving a teenager a loan without a cosigner. When you say the interest rate is higher, how high? Have you run an amortization table to understand the amts? deferring payments while interest accrues makes loans mushroom. The loans where interest is deferred are in a totally different category.
Make sure you have a loan officer run an amortization schedule with you for the financial scenario when you add the loan amts every yr so you see the big picture, not just your freshman yr. Even if your parents just made the interest payments for you while you were in college, you would see a difference. But, unless they cosign to begin with, you need to make sure you are eligible on your own.
@fergus3 - You’re correct, if you’re going to get a non-government loan, you need to find one that would allow you to defer payments until you graduate. And, in future years anyway, you really do need to find a better summer job - if you can earn even $3,000/summer during subsequent summers, that would take a significant chunk out of that outside loan. Ask your parents to help you - maybe they have friends who could offer you a job.
Well, @Mom2aphysicsgeek, that was something they needed to think about before they got the pets. What would you suggest they do now - have the pets get jobs and pay their own expenses?
@Fergus3 You are very close to not being able to afford college. You need to work more now. 30-35 hours is not enough. Your low paying camp job is putting your college in jeopardy. There will be more expenses not less if you go to college.
@mom2aphysicsgeek I talked to my parents last night and they said they would cosign if it was necessary for me to get the loan (which it sounds like it is) although they are reluctant to do so. I couldn’t find the exact interest rate, only that the credit union web site said that it was higher than other payment plans. We haven’t met with a loan officer yet or talked with our credit union or bank at all yet, but I will make sure to see how each plan would affect me far into the future (not just freshman year).
Fwiw, @fergus3 I do wonder how you will make the ends meet even at the lower cost school. Your job isn’t going to generate enough$$ and without the cosigner, it is still hard to imagine you having enough. One thing you could do is contact Tulane and see if they would allow you to take a gap yr for working fulltime. Would your parents allow you to live at home for free? If you banked every cent, you might have enough to make it work if by the time you are a jr or sr you could get a higher paying coop job.
Students whose families can’t, or won’t, cut other expenses to free up money for college can fill the gap by taking the federal student loan (~$5500), working, asking the parents to cosign a loan, or choosing a school that’s less expensive and/or offers more merit aid. If the student loan isn’t enough, and you can’t earn $7500/year, and your parents won’t cosign a loan, your only option is finding a less expensive school.
@dodgersmom@gearmom In future summers I may take on a different job that I can earn more money at, but for at least this summer and next summer I will be working as a camp counselor. And I am actually not in school, I just graduated early for the sole purpose of working. However, the company at which I work doesn’t allow for part time employees to get more than 40 hours a week, and I’m still technically part time. Because I can only work “full time” for the next two months, most places won’t hire an employee for such a brief amount of time, so I can only increase my hours at the company I already work with (which I have already done).
@fergus3 What is your major? So you are looking att adding 3 to 4 k in loans a year. You could have over 40k in debt at graduation. Have your bank help you fire as your future payment plans. Predict your future salary after graduation and compare. Can you live at home after graduation? If you pay your parents rent?
@gearmom I am undecided in my major so far, but I want to double major in whatever I decide. I could live at home after graduation if I absolutely had to.
An extra 3k a year is 12k over four years. Even if you work and make more in subsequent years that is still 12k anyway you look at it. Just on that small amount interest will accrue while you are in school and the amount will be more. 12k to 15k will be more than $150.00 a month for 10 years. (Google loan calculator and 12k at 9% interest for 10 years is 153.00/month and that doesn’t take into account the interest that would accrue before you could start paying). That is in addition to the loans you can take, which you can google and figure out how much they will be.
I am not going argue with someone who has parents who will not pay. I didn’t have extra money, had kids at home, had retirement to save for, all of those things your parents have.
But you need to make hard choices. To work a different job, even though the camp is really important. To pick a cheaper school, maybe even one you can commute to. You can try and get loans. But it’s risky and is mortgaging your future. Because in the future you will have housing and things and all of those expenses that your parents have now. And can’t contribute to for your college.
I don’t want to alarm you, @Fergus3 . . . well, no, maybe I do. If your parents are cosigning for you, they’ll need to qualify again for new loans each of the years you’re in college. The loan amount you’d need is not huge, but there is always the possibility that they may not qualify in one or more future years. So, the more you can earn (starting ASAP), the less you’ll need to borrow, and the less likely that something would go wrong in future years.
I know you said the summer camp job is non-negotiable, but now you’re talking about taking that low-paying job next summer, as well. Is it really worth the risk? It may be, but that’s a decision you’ll need to make.
There is one source of funding no one’s really considered, though, although you mentioned it in your first post. Even though you won’t qualify for work study, you can still get a job (or two) during the school year. Even earning minimum wage, that could net you another $4k/year. And perhaps make up for that low-paying summer job . . .
The reality is that $7,000/year is doable, if you work while you’re at school, pick up whatever job it is that you have now when you come home for Christmas and spring breaks (ask them about that before you leave at the end of May), and work over the summer.
@deb922 I am not trying to argue with anyone on here - just seeking guidance and explaining my situation. I understand that many people are in or have experienced similar situations to my own or to that of my parents. Everyone makes it work different ways; I am just trying to figure out how to make it work my way. Thank you (and everyone else who has contributed) for the advice.
@dodgersmom I know the summer job is somewhat an issue. For this year it is locked in, and I really hope to be back next summer, but obviously I will have to reevaluate next spring depending on our loan choices and our financial standings. And I will for sure have a job during the school year - that is something that I don’t have to think twice about! So I will be earning enough to hopefully be making regular payments during the school year which I plan on doing now (just not sure how much I should take on - interest AND prinicpal or just interest? I looked at our credit union’s options and deferring payment completely would create $10,000 in finance charges on top of the principal - ouch!). I already know I can work at the company I currently work for on breaks, which is awesome. I very much appreciate your advice!
@gearmom - It’s not $50k in debt. The OP has to cover a total of about $50k. At least $8k will come from summer earnings over the next four summers, and another $12k (or more) will come from school year earnings over the next three years (not counting senior year earnings). That reduces the total to $30k, which is only slightly above the OP’s federal loan eligibility. That’s a manageable amount.
@Fergus3 - I think you’d want to limit yourself to interest payments only for at least the first year, because you’d need to save the rest of your earnings for the following year’s expenses.
@dodgersmom good point about the interest only payment plan. That is probably what I will end up doing. @CCDD14 I wish, but the camp budget is already pretty tight and there are so many things that need fixing and whatnot around the grounds that I doubt they have enough money to be able to offer me any sort of bonus
