What are options when Parents REQUIRED payment is too much.. next year will have 2 sons in college?

Paying for College
1

We can cover this years EFC for 2nd son… but next year… NO WAY ! There will be 2 sons in college… our family makes $65,000 a year… we have 5 kids at home… having to pay $10,000 for 2nd son THIS YEAR out of our pocket… so we assume next year will be that TIMES 2 (plus more given rates go up & up & up) …

We do NOT want to take out loans in our name… what are our options to get loans in our sons’s name? Can anyone recommend websites to read… a book with all the various loans explained… anything … thank you so much.

2

No, it is not EFC for two kids = EFC * 2. The rule is generally 2 kids = 1.2 * 1 kid, BUT I believe at least one of the colleges has to agree to that.

You don’t get loans in your kids’ names, they get loans for themselves.

It sounds like you are very early in the process; lots of info online about FAFSA and so on. Read the CC threads on FA for multiple children in college.

Here is one such thread: http://talk.collegeconfidential.com/financial-aid-scholarships/1733660-understanding-efc-2-kids-in-college.html

3

Are any of the kids in college?

Have you run net price calculators on various colleges with the hypothetical scenarios of one, two, etc. in college, to get an idea of what the net prices will be for each scenario as the kids enter and graduate college?

Have you talked to the kids early (before making college application lists) about the cost constraints that they need to consider?

Have you and the kids looked at large merit scholarship options, such as those listed at http://talk.collegeconfidential.com/financial-aid-scholarships/1678964-links-to-popular-threads-on-scholarships-and-lower-cost-colleges.html ?

College students can only take a limited amount of (federal direct) loans without a co-signer ($5,500 for frosh year, $6,500 soph year, $7,500 junior and senior years).

4

No schools guarantee to meet FAFSA EFC need. You could pay more or less at the next kid’s school. What are the next kid’s stats?

5

Do your children have any credits from Advanced Placement / dual enrollment coming into college?

Have you thought about starting your kids in community college and then moving into a state university?

There should be less expensive options with solid outcomes to solve the financial challenges.

6

Students can only get the federal student loans in their name ($5500 as a freshman, $6500 as a soph, and $7500/year as a jr & senior). If you need more than that to meet costs, the school is likely too expensive for your family.

Planning for college finances is tough. Our income is similar to yours, so I know how difficult it is to make it stretch for college payments. Last year, my son got accepted to a dozen schools and got merit aid at many. However, our net cost at most was ~$20k/year. In order to pay that he would’ve needed the student loans ($27k total) and we’d have to pay our $5k/year EFC out-of-pocket ($20k) plus take ~$10k/year in parent (PLUS) loans ($40k). That’s just not affordable on our income. His other option (interestingly enough, his first choice school) was an in-state public that he can commute to and graduate with no debt. He chose the state school.

How did you get an EFC of $10k on a $65k income with 5 kids? Is that just your net cost after grants? It seems high. Your son may be better off taking a gap year to look for more affordable schools. If he does, don’t let him take any credit classes because that can disqualify him from freshmen grants.

7

Full need met colleges do reduce the EFC for a 2nd child in college but not sure what college your 1st is in or going into.

8

It all depends on the college’s your kids attend. If both attend generous colleges they meet full need for all admitted students, you might (note…might) be OK.

If either of your kids attends a college that does not guarantee to meet full need, you could have financial issues next year.

Your FAFSA EFC will be reduced for both kids when you have two in college. BUT that does not mean you will get additional need based financial aid to fill the gap between what you can pay,many the cost of attendance.

This all depends on the need based policies of the colleges.

9

So many questions… I am not sure I am even reading the answers “correctly” to what I am asking… still very confused… all this NET cost talk… well that is what I mean… our supposed EFC would be $3,000 - that’s a Joke, isn’t it… that means basically nothing… I was also TOLD THIS DIRECTLY BY THE COLLEGE financial aid office…

Ok… This is our 2nd son going to college (1st son did the lowest cost College in the state)… all we helped him with was paying his Un-subsidized loans (so he could save on Interest)… he’s on his own now, still paying them off …all loans given to us -was in the financial aid package type thing.

This is 2nd son… he is attending University of Pitt …(this is not a high priced school by most’s standards)… are we allowed to put links on here ?? (Tuition & Fees In-state: $17,772 …Room & Board $10,800, Books add $1,000 , then other expenses…

I already paid the 1st semesters Tuition, Room & Board. (total $4, 880) …Spring semester is due Mid December (likely same amount or more)…

Other option was Geneva college (Christian, private) … Price higher even… but was giving many Grants to get you in the door…He wants to take Chemical Engineering… 3rd son going next year… he wants to take Mechanical Engineering… He may want Pitt also or Penn State Behrend (near the same sticker price)…

All I know is this… we can afford to pay this $10,000 out of our pocket for this year for 2nd son… but next year we will NOT be able to pay this 2 times for 2 sons… What are my options… we did the FAFSA in January… these figures are all after he got all the financial aid/ grants, work study he is allowed by the state, government… he didn’t quality for the $3,000 scholarship given by University of Pitt… (his SAT scores were not high enough)…

ucbalumnus said “College students can only take a limited amount of (federal direct) loans without a co-signer ($5,500 for frosh year, $6,500 soph year, $7,500 junior and senior years).”…

Please bare with me… Is what you are saying here meaning… besides what is given in his Financial aid package (already he has Fed Pell grant ($2,225) Fed SEOG Grand ($500), Fed Perkins Loan (($1,000), Fed Subsidized ($3,500) , Fed Unsubsidized ($2,000), Federal work study ($2,250) PHEAA-pa (fall ($1,657) and another for Spring ($1,657)… = total of award $14,789.

Then I minus the REAL COST / total cost for 1 year at $27,644 = really it comes out to us having to pay over $12,00 for his 1st year out of our pockets…

Are you saying SON can apply for another “Federal direct” loan ON HIS OWN (no co-signer) for the amount of $5,500 ?? or am I reading this wrong… that in HIS Financial aid package, he already got this ?

Thank you all so very much for taking the time to answer to me !!

10

I’m afraid he already has the $5500 mentioned - the $3500 Subsidized and the $2000 Unsub.

11

He can’t get any more than the basic sub/unsub plus whatever limited Perkins is awarded (up to 5k if available.) If they already put the student loan in his package then he can’t get any more. No one lends to students in their own name except these fed loans. They need a qualified cosigner. Or if the parent is denied a plus loan, the student can borrow at the independent student rate 9,500 for freshman year.

Year total loan
fresh 5,500 (3,500+2,000)
soph 6,500 (4,500+2,000)
jr 7,500 (5,500+2,000)
sr 7,500 (5,500+2,000)

Never look at sticker price, rather look at cost to you after grants and scholarships.

12

that’s what I thought… so what other loans can be taken out IN HIS NAME ?? We do not want loans in our name…

I was told we can get other loans the other night by parents who do this …also not wanting to take out Parent -plus loans etc… just that WE would have to be co-signers …

Is this correct ?? … these will not have to be re-paid till he is out of school… Now how to go about exploring these options ??

13

I do not think you can find a lender who will lend much if any at all to a student who is not employed. There is no basis to extend credit. If you were told that, then round up those people and get some names and numbers. Yes sure if you are cosigning, then everyone’s name is on the loan. You are just as liable, your credit is affected just as much etc, etc and the rate will likely be unfavorable I suppose. I do not know if private lenders will let you defer payment, perhaps because any loan is negotiated. Try looking at the Sallie Mae pages for their private loans. Otherwise talk to your bank, Discover does student loans. It sounds like the kid is going to be in debt his student loans of about 30k plus 10 each year extra totaling 60k? Sounds too steep to me. How is a kid right out of college going to make a $650+ per month loan payment?

If son doesn’t have a job or one that pays enough, he can do income based repayment on the student loans, but not on the private loans, you will have to pay it if he can’t because you cosigned. Prep next kid to look for merit aid colleges.

https://www.salliemae.com/student-loans/

14

thumper1 said : It all depends on the college’s your kids attend. If both attend generous colleges they meet full need for all admitted students, you might (note…might) be OK.

If either of your kids attends a college that does not guarantee to meet full need, you could have financial issues next year.

Your FAFSA EFC will be reduced for both kids when you have two in college. BUT that does not mean you will get additional need based financial aid to fill the gap between what you can pay,many the cost of attendance.

This all depends on the need based policies of the colleges.

This is why it gets so confusing… they say this… you hear it all the time… but it basically may mean NOTHING.

Brown parent said: Or if the parent is denied a plus loan, the student can borrow at the independent student rate 9,500 for freshman year.

Now here is the kicker… Husband & myself have excellent credit… we are very frugal minded people, have never taken out a loan in our marriage except for our house & cut that in half paying it off in 7 yrs… we will NOT be denied Parent plus loans… but again… we do NOT want to take them out.

So are you saying. Our son(s) won’t be able to get any more loans unless our credit is bad , then they’ll qualify ?? if so… this ROYALLY sucks!

15

EFC means something, but it depends on the circumstances. They didn’t make it just for you and your circumstances. There are 2 types of EFC, the Federal EFC which qualifies you for Pell or not. And for very generous colleges there is the Institutional method EFC and colleges that meet 100 pct of need will give you aid for all the portion over your EFC, but often including your student loan as aid. Since you aren’t going to a college meeting 100 pct of need you have a Gap which you need to come up with yourselves.

I am saying that there is no more federal aid in the student name unless you are turned down for Plus loan. Then the student gets to borrow at the rate independent students borrow at, 4k extra per year total 9,500. I guess since in that case the student and family would have no where else to come up with a few extra thou. Sometimes that 4k can get the student through the year but in your son’s case it doesn’t sound like enough anyway. If you think he is so credit worthy, basically you can lend to him. Only the govt lends to students in their own name and it is capped within what is likely to be repaid.

16

BrownParent said: . I do not know if private lenders will let you defer payment, perhaps because any loan is negotiated. Try looking at the Sallie Mae pages for their private loans. Otherwise talk to your bank, Discover does student loans. It sounds like the kid is going to be in debt his student loans of about 30k plus 10 each year extra totaling 60k? Sounds too steep to me. How is a kid right out of college going to make a $650+ per month loan payment?

If son doesn’t have a job or one that pays enough, he can do income based repayment on the student loans, but not on the private loans, you will have to pay it if he can’t because you cosigned. Prep next kid to look for merit aid colleges.

I REALLY apprecaite your advice… I have learend something about forums though. my last thread here (and another where I deleted my thread on the College dilemma) was about how I originally wanted son to go to a LOWER priced school (well sticker was MORE but cost out our our pocket DO-able, one third less )… he had a bad break up and I wanted him to change his plans -for 2 reasons -(on other thread) but people seem to be very opinionated and all over the map on this…

Some feel strongly you ar a bad parent to Want to take them out of a “KNOWN” school… calling it all GOOD DEBT… (me personally I would choose the lower cost option !!) but No. we couldn’t talk him out of it… though NEXT year… we can put our feet down if it’s going to cost us… he’ll have to then go to the other school if he wants to contunue… whatever… or get some jobs in the meantime…

But Yeah… I THINK LIKE YOU DO… at this point in the game… I think I’m going to have to allow him this year in this school… he had a BAD breakup with a GF of almost 4 yrs…and I was worried about his emotional well being on top of all of this… changing his plans right now… probably not for the best. Parenting is not so easy sometimes.

17

This is his first year or 2nd year?

18

I’m confused, are they both in college at the same time or is one out of college already?

19

Ok, I think that 1st son graduated. 2nd son is starting Pitt in fall, 3rd son starts next year tbd. According to prior thread, 2nd son was being allowed to go to a school that is too expensive for them for some reason has to do with a l/t girlfriend. Even though girlfriend is not going to that school. 10 days ago girlfriend broke up with him. 10 days ago there were 2 colleges open, this one Pitt, which seems they can’t afford and Geneva college which is going to be 7k cheaper because of grants.

Now @OverRunMama I understand that this breakup is causing some havoc and I hope it has calmed down. But you have 2 kids to put through college in short order. You can’t afford the school he is going to. If he has to transfer he will not get the the better aid offers that are there for freshman. Often transfers get no aid. It would be a shame to drop out due to lack of funds and wasted the expensive college on the first 2 years and have to go somewhere very cheap to finish. Better to start cheap and finish with the expensive name on the diploma. I would call Geneva up and see if they will still extend his offer. Pitt should refund everything but the deposit. Having 7k a year less to pay will make it a lot easier to get through.

And start a new thread for 3rd son so we can help suggest colleges that might be more affordable for him.

20

Ah, three sons total…

Remember OP, and everyone else, it IS possible to go to a great college on the cheap, but you need to be creative. One option is to get a four year degree somewhere cheap, but do really well and either get into a great grad school for a PhD (generally tuition remission and a stipend to live on) or work at the college of your dreams and get a master’s while you work

http://nypost.com/2012/05/13/what-class-columbia-university-janitor-graduates-with-honors/

It is NOT a joke; most top schools have tuition remission for employees.