Student Loan Info Needed

[Aurora D]

My son is a third year undergrad student. So far, we have taken out ParentPlus loans to cover his tuition and expenses. He also qualifies and receives both a Fed. Sub. and Fed. Unsub. loans that only total $6,500 for the year. I'd like for him to get the loans in his own name going forward, but I'm overwhelmed by the choices. Anyone with experience please let me know what may have worked for you.

 

[disneymagicgirl]

All the financial gurus say never get private student loans. Whatever he can’t get in federal, I’d continue taking out In parent plus. Or better yet, have him get a job to pay the difference.

 

[StacyStrong]

I've only ever taken out two small Perkins loans through my school and fed loans. I've heard horror stories about private loans, so personally I would stear clear, but if its your only option, then so be it.

 

[barkley]

My son is a third year undergrad student. So far, we have taken out ParentPlus loans to cover his tuition and expenses. He also qualifies and receives both a Fed. Sub. and Fed. Unsub. loans that only total $6,500 for the year. I'd like for him to get the loans in his own name going forward, but I'm overwhelmed by the choices. Anyone with experience please let me know what may have worked for you.

my dd just graduated a few weeks ago-ALL of her fed sub and unsub were issued in her name only (as well as her perkins) so if it's those loans you are speaking of then the existing may already be in solely his name and can easily continue to be. if you are talking about shifting the parentplus to his name only i don't think that can be done unless he takes out an entirly new loan to in effect pay off those parentplus loans.

call the financial aide office at your ds's school (have him next to you on speaker phone so they will speak to you about his specific loans unless they already have paperwork on file granting you permission)-they can provide you with the most up to date information on the existing loans as well as the ones he qualifies for next school year.


edit to add-did he indicate on his aide application that he is willing to take work study? if not see if it's not to late and if he might qualify. dd got an additional $3500 per year in non loan monies by working on campus AROUND HER CLASSES through work study-sure it only pays minimum wages for the most part but it's also exempt from some types of employee taxation and the campus employers work around student class scheduals. $3500 x 2 or 3 more years of undergrad could add up.

 

[martikus]

Please use caution with additional loans. It is very easy to take on enough loan debt to be unmanageable in repayment.

A private loan will mean a minimum payment to them and minimum payment to federal loans (subsidized/unsubsizied) which can be hard too. There are companies that will consolidate both upon graduation but be VERY careful as you lose federal benefits when you do that - like automatically deferring loans when attending grad school.

His financial aid office should have a lender list. If they don’t then honestly maybe find one on another school’s website. Our state offfers a private loan. So that is an option too. Private loans are based on CREDIT so it is very possible your son will need you as a credit-worthy co-signer based on age alone.

There are fixed and variable interest rates. With interest rates going up I’m inclined towards fixed interest rate because then no surprises. Ideally find a loan that has no upfront fees. Some will interest payments while in school. Your son will have to apply to know if approved or denied and the interest rate.

There are also parent/family private loans these days and sometimes those loans can be lower rates than Parent PLUS without the upfront fee too.

I’m surprised your son can’t get $7,500 in sub/unsub as Juniors usually qualify so I’m guessing he is missing some credits to be a true Junior? As soon as he makes junior status (90 credit hours in many places) he can get loan increased from $6500 to $7500 for the spring semester.

 

[winnieofpooh]

I agree with everyone else here, I'd highly advise against private loans unless there is legitimately no other option. My fiance had to take out 4 years of private loans for his room and board expenses, and has to pay back double what I have to pay back, and I took out 4 years of federal loans to cover tuition (way more than room/board costs).

 

[MantaRider]

If you have to - I got mine through SoFi, paying them back through SoFi Mohela. This was actually a re consolidation of the original loans I had through Sallie Mae, which I got my cosigning with an older family member. There's very little chance your student will be able to sign by themselves unless they already have very good credit.

My interest rate isn't ridiculous, but the only reason the loans aren't killing me is that we carefully planned for this. Go into it with caution and make sure you know what the repayment is going to look like beforehand.

I just paid off my federal loans and am on track to pay off the others in a few years, but FYI combined they were almost as much as my rent.

 

[floridafam]

He should be eligible for $7500 in total loans if this will be his third year. I believe it is $5500 first year, $6500 second year, etc. The school will use his need to determine how much of the loan is subsidized and how much is unsubsidized.

Parent Plus-if you have to add that-is better than a private loan.

Can he do work study?

I have a 4th year undergrad and a 2nd year undergrad. The differences with how their financial aid works are really surprising. They are both at private colleges in Florida.

 

[MantaRider]

Are they at different schools? It's surprising the level of help you'll get from individual aid departments. Mine told me to go home and look up scholarships online.

 

[floridafam]

Are they at different schools? It's surprising the level of help you'll get from individual aid departments. Mine told me to go home and look up scholarships online.

My kids are at different schools. It’s like night and day. One fin aid department gets everything correct to the dollar. The other is like pulling teeth.

 

[floridafam]

Have you taken out the parent plus loans INSTEAD of his loans in previous years?

 

[floridafam]

The student loans that your student takes out while in school aren’t private loans and they are through the government.

I guess I need a little more information

 

[OhMari]

Parent Plus Loans cannot be in your son's name. It will always remain in your name.
If you want your son to pay the Parent Plus Loan, I would get an agreement written between the both of you. But he cannot take out a Parent Plus Loan, you will still have to have it in your name.

Sallie Mae used to be to "go to" loaning lender 10 years ago, but they are now Nelnet.
I had 4 kids graduate college. My oldest have Federal Loans in the 2% range. When my youngest attended the Federal range was 6%.
But the private student loan company's were all around 13%. Since she was our youngest we really helped her out, and we also did with our 3, but
we really helped her out.
She roomed with 4 other girls in a TownHouse and her rent was $200 a month.
We bought groceries, we prepped food together and she would take half and we would take half-(Freezer-crock pot meals).
She worked 20 hours a week, luckily her employer set her up to do clerical work from her office in her home she rented. She worked for them since she was 16.
We put gas in her car, paid her insurance on her car, which we bundled into our car insurance for a cheaper rate.
It was a lean 3 years for all of us, but we did it. It helped that UW-Green Bay's tuition was $4,000 a semester. She got about 1/2 in Student Federal loans and we came up with the 2nd half between us.

Good luck with your decisions.

Hopefully when your son graduates, he will have a good paying job, sounds like he will have loans exceeding $25,000 or more, which is pretty normal, but he will be making at least a $300 a month payment towards his loans.

 

[floridafam]

This is the way I've always looked at it:

Student loans have lower interest rates than Parent Plus loans, so maximize the loan your student takes out before you take out a parent plus loan.

Subsidized loans are better than unsubsidized loans.


He can take out a max of $7500 in his name for his junior year. It's going to be up to all of you how you obtain the rest. It's not likely he will be able to get a private loan unless you co-sign. At that point, it would probably be easier to do the parent plus loan and have some sort of agreement that he will pay it back.

Definitely look into work study and scholarships. There are thousands of scholarships out there for the taking.

Does his college take your EFC into account? (Expected Family Contribution from the FAFSA.)

 

[FredtheDuck]

The number one thing I'd caution about when using private loans:

If your son ever does something for a living that allows for public service loan forgiveness (some federal/state government employees, some teaching positions, some nursing positions, etc.), his FEDERAL loans are the ones that are going to be factored into the loan amount to be forgiven at the end of his service term. His privates are outside that equation. If he marries someone that qualifies for public service loan forgiveness, HIS fed loans might be able to be factored into both the payments that are made during the service term and the forgiven amount. His private loans are completely outside that equation, too. Lesson we learned too late (we were both graduated with a mix of both loans before PSLF came on to our radar).

Also, and others have said this, the protections in terms of forbearance and deferment as supposedly better with federal loans. That said, Navient (formerly Sallie Mae) is currently getting sued in a class action suit because of their actions in the space. My privates are with a different lender (SoFI), and I've been really happy with them. They offer some forbearance/deferment options, too, but I haven't utilized them so I can't speak to the ease of access.

All of that to say: see what you can do with fed loan and work-study (and scholarships!) before he has to walk down the private loan path. And give yourselves plenty of time to sort it out.

 

[MrsPete]

o far, we have taken out ParentPlus loans to cover his tuition and expenses. He also qualifies and receives both a Fed. Sub. and Fed. Unsub. loans that only total $6,500 for the year. I'd like for him to get the loans in his own name going forward, but I'm overwhelmed by the choices. Anyone with experience please let me know what may have worked for you.

Are you saying you've essentially borrowed for everything for two years? You're setting him up for trouble in the future. Yeah, I know, "everyone" borrows, but it isn't the best choice. A few weeks before tuition is due isn't the best time to consider these things, but it is what it is.

Look for ways to avoid borrowing altogether:

- Have him get a job; even if it doesn't pay much, something is more than nothing.
- Transfer to a less expensive college.
- Transfer to a college that's close enough he can live at home.
- Look for ways he can slash his expenses.
- Look into military options -- it's not just active service that helps with college; National Guard and Reserves also help.
- Look into a job as an RA, which pays for housing.
- Assure that he's on track to graduate in four years.