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.
 

Goatman Saint

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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)
Me bad I didn’t remember. My son took years to find himself and grow up. My daughter who is 5 years younger graduated a half year before he did. Yes, somehow he lived. No I don’t understand how. I give all credit to his girlfriend.
As far as filling out the paperwork and such, after my daughters freshman year, she just did it all for both her and my son. She had all my passwords and such so she just did it. I hate filling out forms, and minute detail form filling out stuff is her strength.
 

Dago

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Me bad I didn’t remember. My son took years to find himself and grow up. My daughter who is 5 years younger graduated a half year before he did. Yes, somehow he lived. No I don’t understand how. I give all credit to his girlfriend.
Is all good....I have dealt with it for nearly 20 years

Want to hear something that should piss you and everyone else off?
Know how the government talks about the student loan crisis? As far as they are concerned there is no crisis. While it varies from year to year, the government profits about $52 billion a year on student loans even with all the defaults.

Kinda answers why they eliminated competition from private loans
 

Grandadmiral

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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)
This is not true either anymore. That 33% rule was tossed. ED now says if a file is selected it has to be verified. They've decreased the amounts being selected for verification because they implemented the IRS Data Retrieval tool that pulls income info directly from the IRS. So that tosses any idea of lying if someone was to think that. If you refuse to use the DRT, 9.9 times out of 10, your getting selected for verification, at which point the only acceptable document is the tax transcript from the IRS.

To Ward's original question, my suggestion before applying for the PLUS loan, check with some of the private banks (Wells Fargo, Navient, etc.). Based on credit, you could get a better rate than the PLUS loan and actually serve as a co-borrower that can come off the loan in two years if your son is responsible financially.

I still have some contacts from my prior life running financial aid offices so let me know if you have any other questions.
 

Dago

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This is not true either anymore. That 33% rule was tossed. ED now says if a file is selected it has to be verified. They've decreased the amounts being selected for verification because they implemented the IRS Data Retrieval tool that pulls income info directly from the IRS. So that tosses any idea of lying if someone was to think that. If you refuse to use the DRT, 9.9 times out of 10, your getting selected for verification, at which point the only acceptable document is the tax transcript from the IRS.

To Ward's original question, my suggestion before applying for the PLUS loan, check with some of the private banks (Wells Fargo, Navient, etc.). Based on credit, you could get a better rate than the PLUS loan and actually serve as a co-borrower that can come off the loan in two years if your son is responsible financially.

I still have some contacts from my prior life running financial aid offices so let me know if you have any other questions.
The 33% rule was not tossed and they dont verify 99/100 of those who dont use the DRT

Up until March I had been doing this for nearly 20 years, handled annual audits, and worked with one of the top Title IV processors in the country. There are 6 types of verification a student can be chosen for and only 2 of them are income driven
 

Goatman Saint

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This is not true either anymore. That 33% rule was tossed. ED now says if a file is selected it has to be verified. They've decreased the amounts being selected for verification because they implemented the IRS Data Retrieval tool that pulls income info directly from the IRS. So that tosses any idea of lying if someone was to think that. If you refuse to use the DRT, 9.9 times out of 10, your getting selected for verification, at which point the only acceptable document is the tax transcript from the IRS.

To Ward's original question, my suggestion before applying for the PLUS loan, check with some of the private banks (Wells Fargo, Navient, etc.). Based on credit, you could get a better rate than the PLUS loan and actually serve as a co-borrower that can come off the loan in two years if your son is responsible financially.

I still have some contacts from my prior life running financial aid offices so let me know if you have any other questions.
I cannot wait to be off my kids. My debt to income ratio is eek right now because I co-signed everything
 

Grandadmiral

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The 33% rule was not tossed and they dont verify 99/100 of those who dont use the DRT

Up until March I had been doing this for nearly 20 years, handled annual audits, and worked with one of the top Title IV processors in the country. There are 6 types of verification a student can be chosen for and only 2 of them are income driven
So was I.
 
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Is all good....I have dealt with it for nearly 20 years

Want to hear something that should piss you and everyone else off?
Know how the government talks about the student loan crisis? As far as they are concerned there is no crisis. While it varies from year to year, the government profits about $52 billion a year on student loans even with all the defaults.

Kinda answers why they eliminated competition from private loans
Yeah, that's one I figured out right away. It's the same reason I scoff every time they talk about doing away with student debt.
 
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I cannot wait to be off my kids. My debt to income ratio is eek right now because I co-signed everything
Same here, I was considering refinancing my home recently with the rates so low and though the loan officer told me to wait a couple of months, she did tell me that the student loans would count against me.
 

saintmdterps

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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.
If you have equity in your home, you may be better off with a cash-out refi. The interest rate will be lower, and it's treated as installment debt vs HELOC which is treated as revolving debt, and thus has a bigger impact on your credit score. For example, it your child needs 7K per year to make up the difference, get the 28K and set it aside for that purpose.

These tuition figures are hard to imagine. I graduated in 1987 with a total of 12.5K in student loans, then went back to OT school in 2002 for a total of 10K (second year picked up by State of Md Workforce retraining grant) and I consolidated the 10K after graduation in 2004 at 1.65% for $70.75/month payment. Just paid it off last year :)

At least that's the one damn thing I did right with regard to finances.
 

baarbogast

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have you looked into the guard or reserves? He can get 100% tuition plus several hundred dollars each month.
 

Jeff Miller

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A plus loan is a loan in YOUR name, not the students name. That means you are on the hook for it, not your child. I highly recommend you never sign any Parent Plus Loans, the schools know the students can't cover the whole cost anymore and are forcing them to use Parent Plus loans to make up the difference. If your child doesn't pay it back, they come after you for the money, and know, if you ever declare bankruptcy, you can't get rid of them in a bankruptcy under the law either. I don't recommend every doing it. If the child can't get by without a Parent Plus loan, they need to find a different way to pay for things or look at a lower cost options. Its not worth putting yo 10's of thousands of dollars into debt.
 

Goatman Saint

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A plus loan is a loan in YOUR name, not the students name. That means you are on the hook for it, not your child. I highly recommend you never sign any Parent Plus Loans. If you child doesn't pay it back, they come after you for the money. I don't recommend every doing it.
Any college loan a parent will be co-signing. You really think the banks are handing out tens of thousands of dollars to under 21 year olds with little to no credit history?
 

baarbogast

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If I remember correctly it’s only about 18,000 overt 4 years.
Ohio used to be 100% for state schools and they would pay $600/yr or a % of your loans annually. You could also get drill pay, GI Bill , some sort of a kicker.
 

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