Question about student loans

[TheKayla]

Thats one thing I don't agree with Susie Orman on, only because so many student would plain and simple not be able to get an education with the way the current system is set up -- I would not have been able to cover the costs of school as I would not be able to qualify at 17/18 years old for them. I think it is important to identify your own situation though. My mom co-signed my loans, and took out Parent Plus loans, all of which I am currently paying for as I said I would myself. Maybe you'd prefer your kids going to cheaper schools, saving up for it themselves up front, or saving yourselves for when that time comes. Truly, that'd be the best situation. My parents never saved for my college ahead of time because they didn't think it was necessary -- until 20 years later when 'a college degree became the new high school degree' in terms of importance, and college costs rose by thousands of percent!

[BMEPhDinCO]

When you fill out the FASFA, she will qualify for any loans offered through that without a cosigner, although they may also offer PLUS loans, which are the parent/co-signer ones. You can take however much you want out of the offer, it is YOUR choice (or rather, your daughter's).

I had no issues without a co-signer, but my loans were all federal.

I would suggest the credit building too - my parents did this by adding us to their cards, but not giving us one! That built credit without worrying about something bringing up their bill.

[TheMom]

One thing I've heard is that you should have a life insurance policy on her for the amount of the loan. If the unthinkable happens and she passes away, at least you won't have to pay the student loans off still.

[stoney508]

I was able to get most of my school paid for my first semester I paid for and partially my second semester but since my finacial aid did not cover everything up until my junior year my parents had to take out a Parent PLUS loan. Without that I wouldn't have been able to pay for college. My parents didn't save for me so I was on my own. I also took out a private loan they had to co-sign for in order for me to pay for my rent. Without all this I would not have been able to go to college. I see the wrong in having your parents co-sign for your loans and I wish they didn't have to but I am very greatful that they did. It does have something to do with how you raise your kids and that they understand what is actually going on. I had an understanding but I did not know enough and I am upset they still have the parent PLUS loan (in process of paying off private loan). I will eventually take over the loan and try to make it up to them the best I can when I am finacially stable. Unfortuntly I do not make enough at this moment or am set to take on the loan at this moment but I know I will make it up to them.

[moneybags]

This is good info. We have talked about getting her a credit card. I was waiting until she turned 18 next month. That will still give her time to build a credit history. We have enough saved to cover all of year one of college and probably most or all of year 2 and that's if she gets zero in aid or scholarships. So she probably won't need to take out any loans until year 3 which is 4 years away.

I think Stafford loans can be obtained by students without credit. They are for a minimal amount, around $5,000, depending on the year of school. Maybe you could have her take the maximum on this loan years 1 and 2 and use that amount of your money for year 3. By that point, I think her major, career options, and job market may be a bit clearer so that you can decide on co-signing loans at that point.

[disneysteve]

I think Stafford loans can be obtained by students without credit. They are for a minimal amount, around $5,000, depending on the year of school. Maybe you could have her take the maximum on this loan years 1 and 2 and use that amount of your money for year 3.

That makes sense. Plus it would allow the money in her 529 to grow tax-free for an extra couple of years rather than spending it from day one.

[sblatner]

Suze Orman's show on 8/10/13 talks about student loans. You can watch it on iTunes.

[annibe11e]

My son took out federal loans in his own name.. He was 18, but qualified as an independent student because he had lived with a family friend that I legally assigned as guardian. I don't know if that made a difference. I know federal loans are handed out without credit checks or income verification, but I don't know what she would qualify for if she's considered a dependent student and your income is considered.

[stoney508]

Originally Posted by moneybags
I think Stafford loans can be obtained by students without credit. They are for a minimal amount, around $5,000, depending on the year of school. Maybe you could have her take the maximum on this loan years 1 and 2 and use that amount of your money for year 3.



When I took out loans for college in 2005-2007 my finacial aid only covered a portion of my tuition because they tapered how much I was able to revieve each year getting a little more. This is why my parents took out a Parent PLUS loan.

[creditcardfree]

I would guess that Federal student loans do not have credit checks because the government is the cosigner essentially and the borrower is obligated to pay those back or face wage garnishment. Bankruptcy is not allowed on Federal student loans either.

[mikal]

When I went to college I took a loan for my studies. I my case I tried to take loan on my own but the bank rejected my application and I had to bring my parents and after that they accepted my loan application. I think it is very difficult to get loan on your own but there might be some financial organisation who may give this kind of loan.

[ESMonitor]

Ok wait a minute...you're a successful doctor making big bank...at 17K posts on this site it's pretty safe to say you have a solid understanding of personal finance....which means you should be way ahead of the game on a doctor's salary. I believe you said you have a family of 3 from a previous post, so you have just one kid that's a about to go to college, right?

My question is, why not just pay the tuition and give your kid a stipend to live on??

Or what if kid went JUCO route for a year or two living at home with yall while working apart time job? Would save tons of money. Just make sure the credits transfer.

These are tough times and this country is steady sinking...

I would advise you to rethink putting your kid in debt.

Do the reverse! Set the kid up with a Roth IRA as a high school graduation present and fund it until he or she can take over post college graduation.

Maybe make some stipulations, as in your funding requires a minimum 3.25 GPA per semester.

The bottom line...if you are making $400K a year on doctor salary, if you are financially set and you're going to make your kid take out student loans?? that is just WRONG. C'mon man.

[stoney508]

If you ask me just paying all of your kids college education is wrong. Helping them out on the other hand is good practice. Sometimes as kids or young adults they need to learn what the real world is like and that debt is not a good thing to have in general. The first time you get in the mail your loan amounts (they should know them in advance but many do not) is a very big eye opener especially when you see the due date comeing up fast.

I believe that you have to teach your kid to be finacially aware of what they are doing by taking out the loans to go to college and what a lot of people are doing these days just to get the college education. I was not benefited with parents paying for my college and I went to college with someone that had his paid for in full is he better off. Yes on a finacial level but will he gain the knowledge of what it is like to have to pay off debt, I doubt it.

[ESMonitor]

Ok, this is a sensitive issue. It's up for debate. My take, if you have the $$$ surplus, pay your kids tuition or the bulk of it. Maybe make your kid take a part time job while in college and definitely student jobs. Make them understand. When I was in college I used to do landscaping work, at one time I was a top collector for a local collection agency, and did houseboy work for a sorority.

It's a shame something like financial peace is not a 3 hour credit course in college, but it should be...that's just on the tip of the iceberg of what's wrong with the system these days.

I'm not blessed with a kid of my own but I would pay the tuition CONTINGENT on a good return, as in good grades, no DUIS, no hanging out with wrong crowd, in church on Sundays, just to name a few. That keeps the funding stream going. Stay on top of them about it.

You screw up, you come back home and work for a year...there are ways...I saw it happen with me and my friends' college campaigns.

Another 3 hour course I think should be offered is a semester study of Book or Proverbs...with the right teacher (like financial peace) that would help eliminate tons of unneeded crud in your life. That would help you out so much more than studying some bs course like stats I, I promise you.

I guess bottom line here is get that kid ready to fly out of the nest as best as you can. I say that only because I am a Christian and I believe that is what Mary and Joseph did with Jesus, and obviousloy it worked out well for him or I wouldn't have a Savior to help navigate me out of this sinking madness that is 2013 USA.

[moneybags]

If you ask me just paying all of your kids college education is wrong. Helping them out on the other hand is good practice. Sometimes as kids or young adults they need to learn what the real world is like and that debt is not a good thing to have in general. The first time you get in the mail your loan amounts (they should know them in advance but many do not) is a very big eye opener especially when you see the due date comeing up fast.

I just want to say I disagree with this. My kids will learn what the real world is like without huge student loans.