College Loans (1 Viewer)

Saint_Ward

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Hey, so the boy is off the college in the fall (that's the plan so far, at least....)

He's already set with a nice scholarship and the usual stafford loan. However, he'll need a few k each semester that requires a Federal Direct PLUS Loan, or a private loan.

I sort of forgot to look into this the last couple of months, I have no idea what else has been going on..... oh. Anyway, anyone have any experience with comparing a Federal Direct PLUS loan as a parent vs a private loan and probably co-signing or something. My credit is excellent. Are there better deals for private loans? The PLUS loan is like a 7.08% interest rate.
 

buzd

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I don’t know much about the loan scene but you can get a HELOC for under 4% if you have enough equity and good credit. And you only have to draw on it as needed.
 

St. Widge

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I don’t know much about the loan scene but you can get a HELOC for under 4% if you have enough equity and good credit. And you only have to draw on it as needed.
Good to know since I will be in a similar situation next year around this time.
 
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Saint_Ward

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I don’t know much about the loan scene but you can get a HELOC for under 4% if you have enough equity and good credit. And you only have to draw on it as needed.
I don't own a home yet, so.. that's out.
 
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Hey, so the boy is off the college in the fall (that's the plan so far, at least....)

He's already set with a nice scholarship and the usual stafford loan. However, he'll need a few k each semester that requires a Federal Direct PLUS Loan, or a private loan.

I sort of forgot to look into this the last couple of months, I have no idea what else has been going on..... oh. Anyway, anyone have any experience with comparing a Federal Direct PLUS loan as a parent vs a private loan and probably co-signing or something. My credit is excellent. Are there better deals for private loans? The PLUS loan is like a 7.08% interest rate.
Get ready to hand to get a parent loan as they will cap the amount your child can get a loan for based on your income and your ability to pay vs theirs.
 

Goatman Saint

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Basically, the PLUS loan is the way to go, unless they can qualify with you as a co-signer on their private loan. Then, when it’s all done, and with a good credit history they can refinance for about 2.8% (my kid’s rate) after graduation. If someone has a better idea I wish they would’ve let me know 4 years ago. I personally refused to do a HELOC.
 
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Basically, the PLUS loan is the way to go, unless they can qualify with you as a co-signer on their private loan. Then, when it’s all done, and with a good credit history they can refinance for about 2.8% (my kid’s rate) after graduation. If someone has a better idea I wish they would’ve let me know 4 years ago. I personally refused to do a HELOC.
HELOC was/is of the table for me as I had to get one to help rebuild after Katrina.
 

Krodwhodat

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Hey, so the boy is off the college in the fall (that's the plan so far, at least....)

He's already set with a nice scholarship and the usual stafford loan. However, he'll need a few k each semester that requires a Federal Direct PLUS Loan, or a private loan.

I sort of forgot to look into this the last couple of months, I have no idea what else has been going on..... oh. Anyway, anyone have any experience with comparing a Federal Direct PLUS loan as a parent vs a private loan and probably co-signing or something. My credit is excellent. Are there better deals for private loans? The PLUS loan is like a 7.08% interest rate.
What’s the price of tuition going for these days?
 

Dago

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Get ready to hand to get a parent loan as they will cap the amount your child can get a loan for based on your income and your ability to pay vs theirs.
That's not true at all. The amount a student is eligible for in an award year is determined by if they are dependent or independent. As a freshman, a dependent student is eligible for $5500 with up to $3500 being subsidized. Independent students are eligible for $9500 with up to $3500 being subsidized.

Higher income increases the EFC which determines pell eligibility and subsidized loan eligibility but not total loan eligibility
 
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That's not true at all. The amount a student is eligible for in an award year is determined by if they are dependent or independent. As a freshman, a dependent student is eligible for $5500 with up to $3500 being subsidized. Independent students are eligible for $9500 with up to $3500 being subsidized.

Higher income increases the EFC which determines pell eligibility and subsidized loan eligibility but not total loan eligibility
Ok, so the cap is based on dependence then. Now I understand a little better. So, that raises the question, is it better to claim them and get the tax break or not claim them so that they get a better loan rate?
 
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Saint_Ward

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What’s the price of tuition going for these days?
I closed it a while ago, so I don't remember the exact number. But, tuition is around 6k/semester and room and board is about 5-6k/semester. he has 75% of his tuition covered with Bright Futures, and he has another scholarship that isn't showing on his financial aid yet. Basically, after the Stafford loan he can take (5500), I need to come up with around 3000/semester.

if it weren't for the fact my wife is going finishing her masters, so she has to leave work for a bit, I probably wouldn't even do a loan, but I do want him to be responsible for this, not me. haha.

I think based on credit, I should get better than a 7% APR if I go private.

Anyone use any private student loans? Discover? Earnest?
 

Dago

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Ok, so the cap is based on dependence then. Now I understand a little better. So, that raises the question, is it better to claim them and get the tax break or not claim them so that they get a better loan rate?
A little background:
Used to be that for Title IV student loans there was the FFEL program (loans through banks) and direct loans (loans directly from the government). The government decided they didnt want competition so they attached a rider to the ACA and eliminated the FFEL program. Soon after that, the government threw in origination fees and made the interest rate on unsub loans twice as much as sub loans although currently they have the same interest rate...difference being that sub loans are interest free until 6 months after stopping school (when repayment begins) while unsub loans accrue interest from the time they are originated.

Dependency on taxes and on the FAFSA are defined differently. Also, there is a part that asks for exemptions on your taxes and a separate part that asks about household members. Household members has a much larger affect on the EFC
 

Goatman Saint

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That's not true at all. The amount a student is eligible for in an award year is determined by if they are dependent or independent. As a freshman, a dependent student is eligible for $5500 with up to $3500 being subsidized. Independent students are eligible for $9500 with up to $3500 being subsidized.

Higher income increases the EFC which determines pell eligibility and subsidized loan eligibility but not total loan eligibility
Yearly amount can be whatever you can justify. My daughter rolled everything into her private discover loan (rent, food, gas, sorority, all that) because she was so involved in research and such that working wasn’t really going to be too easy to do.
Now, there is a maximum in debt that you can go into as my son almost go there with his private college tuition. I don’t remember what it is, and I haven’t seen his total loan load to know what it is anyway. All I know is I came close to having to pull that HELOC to get his last semester finished if he didn’t get the grant he applied for.
 

Goatman Saint

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A little background:
Used to be that for Title IV student loans there was the FFEL program (loans through banks) and direct loans (loans directly from the government). The government decided they didnt want competition so they attached a rider to the ACA and eliminated the FFEL program. Soon after that, the government threw in origination fees and made the interest rate on unsub loans twice as much as sub loans although currently they have the same interest rate...difference being that sub loans are interest free until 6 months after stopping school (when repayment begins) while unsub loans accrue interest from the time they are originated.

Dependency on taxes and on the FAFSA are defined differently. Also, there is a part that asks for exemptions on your taxes and a separate part that asks about household members. Household members has a much larger affect on the EFC
You really can’t pull the take them off of your taxes, declare them independent anymore. You’re pretty much stuck with them until they turn 25 or until they get married. I looked at doing that with my son, but that loophole has pretty Much been closed and done away with.
 

zeetes

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lol. you can be like me and not have paid anything towards student loans (federal) for years. i just change the plan from long term to shorter term or whatever every 3-4 months. yeah the loan has gone up over 20k, but sell spent on booze.
 

Dago

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You really can’t pull the take them off of your taxes, declare them independent anymore. You’re pretty much stuck with them until they turn 25 or until they get married. I looked at doing that with my son, but that loophole has pretty Much been closed and done away with.
Let me stress I AM NOT ADVOCATING LYING ON THE FAFSA

That said, virtually no school checks info unless the application is chosen for verification and approximately 33% get chosen randomly

Also the age for being independent is 24 not 25 (which is ridiculous)
 

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