Student Loans for your kids

[jaihawk]

New to this whole thing... My oldest daughter graduated high school mid-term and we've got her taking 9 credit hours at SCC before she starts UNL in the fall. She's gotten 2 small scholarships so far $2k/year for four years. She has applied for a ton, but hasn't heard anything back yet. She's mixed (half white/half black) so we've applied for every minority scholarship under the sun hoping she'll get something there.

I lieu of her still coming up short, what are our options? It looks like Parent Plus loans are the first option they throw out at you, but I'm not a huge fan of that being under our name and us being on the hook for it. Are the private loans like Discover, SoFi, etc... worth a darn? Sounds like you can cosign with those.

 

[LoudHogRider]

We were lucky with our kids, as they both received academic scholarships and our daughter coupled that with an athletic scholarship, so their student loan requirements were within reason. Our approach - as parents - was to ensure that our kids had "skin in the game" financially so that they didn't view college as 4+ years of "whoo hooo!" time, and knew that when they graduated they were expected to earn their own way and pay those loans off.

On the back end of that deal, my wife and I didn't want either of them to leave college with a bunch of debt hanging over their heads, so as a graduation present, they received a nice card with a homemade coupon redeemable for 100% of their student loan debt. That was OUR way of helping our kids through college - we paid it on the back end, not the front end. I think the kids appreciated it more that way, and I know they both worked hard to keep their academic credentials in line as they knew those scholarships were a key to keeping college affordable for them.

Regarding the SoFi, etc., I looked into that when my son was graduating and their loan rates to consolidate were much lower than had we kept the various annual loan structure in play. At the end of the day, I just stroked a check to be done with it. I hate debt.

 

[ThomOsborneMD]

She should finish the first 1-2 years of coursework at SCC then go to a university if she has to take out loans.

 

[sexmonster]

She should finish the first 1-2 years of coursework at SCC then go to a university if she has to take out loans.

Did you do that? Kinda sucks socially.

 

[sexmonster]

New to this whole thing... My oldest daughter graduated high school mid-term and we've got her taking 9 credit hours at SCC before she starts UNL in the fall. She's gotten 2 small scholarships so far $2k/year for four years. She has applied for a ton, but hasn't heard anything back yet. She's mixed (half white/half black) so we've applied for every minority scholarship under the sun hoping she'll get something there.

I lieu of her still coming up short, what are our options? It looks like Parent Plus loans are the first option they throw out at you, but I'm not a huge fan of that being under our name and us being on the hook for it. Are the private loans like Discover, SoFi, etc... worth a darn? Sounds like you can cosign with those.

This is just troubling. Sigh

 

[Blackshirts_Win_'ships]

She should finish the first 1-2 years of coursework at SCC then go to a university if she has to take out loans.

This, with a very narrow set of exceptions depending on where her thoughts are for post-graduation.

 

[ThomOsborneMD]

Did you do that? Kinda sucks socially.

No but I was lucky and didn’t have to take out loans

 

[sexmonster]

No but I was lucky and didn’t have to take out loans

I should have went JC for sports AND school but went to SDSU to play because it was cooler. It didn't workout as I wasn't prepared academically or mature enough.

If you're really being honest of course SCC is best option. I just think if you're in a good program it's ok to do fed loan at a university. That shit is going to get relieved to some degree anyways, let's be honest

 

[Dell Husker]

She should finish the first 1-2 years of coursework at SCC then go to a university if she has to take out loans.

Did exactly this. It cost me the same amount for two years at SCC as one semester at UNK

 

[Jim14510]

Whats major?

 

[...TrueColors...]

She should finish the first 1-2 years of coursework at SCC then go to a university if she has to take out loans.

Yes, this. Even if some academic money is there, this is still the best option. I’ve seen so many kids either fail out or lose their academic money in the first year of college simply because they were focused on other shit.

 

[jaihawk]

Whats major?

She's going to be an Orthodontist.

 

[Jim14510]

She's going to be an Orthodontist.

No idea how hard it is to get into post grad for that. If it's relatively easy SCC is probably fine for the first couple years. If its hard SCC could hurt her.

 

[jaihawk]

No idea how hard it is to get into post grad for that. If it's relatively easy SCC is probably fine for the first couple years. If its hard SCC could hurt her.

From talking to multiple Orthodontists, it's my understanding that taking her first 2 years at SCC would hurt her in that regard. We honestly had her do the 9 hours at SCC because we didn't see a point in her taking a semester of electives (half through zoom) to finish out her senior year, and we thought that it would be a good way for her to stair step herself into college, but taking a little more challenging of classes, while still having a smaller classroom environment.

 

[Blackshirts_Win_'ships]

No idea how hard it is to get into post grad for that. If it's relatively easy SCC is probably fine for the first couple years. If its hard SCC could hurt her.

Orthodontists have to go to dental school. So...quite hard.

 

[Jim14510]

They're going to forgive 50k in student loans anyway so should be fine.

 

[Blackshirts_Win_'ships]

From talking to multiple Orthodontists, it's my understanding that taking her first 2 years at SCC would hurt her in that regard. We honestly had her do the 9 hours at SCC because we didn't see a point in her taking a semester of electives (half through zoom) to finish out her senior year, and we thought that it would be a good way for her to stair step herself into college, but taking a little more challenging of classes, while still having a smaller classroom environment.

Yeah, if she's already accepted to UNL, that's the way to go. Unfortunately, her debt from UNL will be the least of her worries in the long run, but hopefully she's able to achieve her dream or find something related along the way that she might also love. Good luck to her!

 

[ThomOsborneMD]

They're going to forgive 50k in student loans anyway so should be fine.

God I hope so Jim

 

[hothouse_corn]

I really like @LoudHogRider's way of doing it if you can make it work in your budget.

My parents didn't go to college due to me being conceived, and they didn't give me any funding or advice ever, because they didn't feel like they had experience enough to offer advice about college. My youngest brother got financial help from them, but only because their finances were significantly better when he graduated seven years after I enrolled at UNL.

There are a few things to consider: private loans typically have zero origination fees, while federal loans charge some of the loan you/your daughter take out to some entity (don't know where it goes) in origination fees. Borrow $3000, get ~$2750, then be responsible for paying back $3000 at whatever interest rate.

With private loans, your daughter won't usually be charged a disbursement fee, so she'll get $3k when borrowing $3k. If you cosign on her private loans and have a good credit score, the interest rate will likely be lower than federal loans, but won't be subsidized while she's in school, so interest will start accruing from day one. Also, the federal student loan program has some protections for out-of-work borrowers that could be useful in the future for her, like forbearance (still interest accrues).

Sadly, I'm a semi-expert on all of this because I have both federal and private loan balances, but I can't help you because this landscape keeps changing.

So, to end the TLDR post, if LoudHogRider's method works for you, I think it is the best I've heard of.

 

[hothouse_corn]

I really like @LoudHogRider's way of doing it if you can make it work in your budget.

My parents didn't go to college due to me being conceived, and they didn't give me any funding or advice ever, because they didn't feel like they had experience enough to offer advice about college. My youngest brother got financial help from them, but only because their finances were significantly better when he graduated seven years after I enrolled at UNL.

There are a few things to consider: private loans typically have zero origination fees, while federal loans charge some of the loan you/your daughter take out to some entity (don't know where it goes) in origination fees. Borrow $3000, get ~$2750, then be responsible for paying back $3000 at whatever interest rate.

With private loans, your daughter won't usually be charged a disbursement fee, so she'll get $3k when borrowing $3k. If you cosign on her private loans and have a good credit score, the interest rate will likely be lower than federal loans, but won't be subsidized while she's in school, so interest will start accruing from day one. Also, the federal student loan program has some protections for out-of-work borrowers that could be useful in the future for her, like forbearance (still interest accrues).

Sadly, I'm a semi-expert on all of this because I have both federal and private loan balances, but I can't help you because this landscape keeps changing.

So, to end the TLDR post, if LoudHogRider's method works for you, I think it is the best I've heard of.

I'll "black helmet reaction" myself by replying to my own post, but please also keep in mind what will be coming in your future. Do you have more kids that you'd like to help with college? Do you currently have an awesome credit score that will be hurt by co-signing your eldest's loans? Do you want to buy or build a better house? All of these things should be considered.

If you co-sign private student loans, you are 100% signing up to own the debt so far as credit rating companies and banks are concerned. Your debt-to-income ration will include those loans 100%, even though your daughter is the primary borrower. If you want to buy a new house or take out a home-equity line of credit to remodel or add on to your current house, you'll likely be offered higher interest rates due to higher debt-to-income ratio.

If you are confident that your family income will continue to grow, and that your daughter will be fiscally responsible while in college, you do one thing. If you think your daughter might see your financial contributions as guaranteed, do something different.

Financing college or any higher education has gotten way more complicated the past 30 years. UNL tuition increased from $72 to $155 a credit while I was a student, and then they added a per-credit surcharge of $50 per credit for business and engineering students a few years later.

Good luck.