Financial Aid and Tuition - Please Help

[TheRoof]

My father has his own trucking business and my mother is a bookkeeper. Both are hard-working people who don't make very much money. Their biggest obstacle is their thick accent, together they make around 30,000 a year. They own a home, and live peacefully.

Since I was 17, I decided to put myself through school and not having my parents worry about it. I am a Junior In University with a part-time job. My job, It covers rent, transportation, and medical expenses incurred.
I am getting FAFSA, that covers 5550 per year. I've taken out a subsidized loan in the past at 5%. No problem paying for school. This semester because of the tuition hike, the Fafsa AND the FAFSA Loan covers 75% expenses. While footing me with a 3000 dollar bill. This is just tuition, no books. Not counting gas, or anything. (That's why I work part-time to cover that) (I can afford to pay out of pocket for books which costs me around 1000 dollars each year, it puts a dent in my pocket but it's okay)

I can't pay a 3000 dollar bill which is due in 2 weeks. I simply don't have the money, the Financial Aid Person told me to take out a Parent-Plus Loan. The thing is I don't want to burden my mom and dad with MY dept. They can't add another worry to their life. They don't make a lot of money to being able to support me. If they were making even 50,000 net income, then maybe that'd be different.

My only option is to take out a high - interest, with bigger fees. Fixed rate is around 9%. ( I doubt a variable rate is something that gives security)
I am worry myself to death, I am 21 and have been on my own since 18. I guess I have no other choice but take out a loan which is at a higher % rate. (I am dependent, and by my family's contribution. They can't provide anything)

Basically I am on my own, if you were in my shoes what would you recommend?

[hxt1138]

I've been there basically the loan is your option. I've taken Stafford loans from fafsa you don't start repayment until 6 months after graduating. Times are tough, many students simply rack up the costs on the loans.

If you can find a university that costs less i would try that. I did my first 60 credits in a local college, and transferred to a bigger university to finish my degree. The cost is really a big difference. I was able to pay my way through the College but had to take loans for the university.

Also some professionals still have loans. Talking with my optometrist about school i told her how i didn't want loans. She told me she still had them and that actually it helps her to claim them in her taxes every year which is why she hasn't payed them off and doesn't plan to do it in a hurry. I'm not sure how accurate that is, but its something to think about.

Another option which you might not like as much is to take the loans BUT take summer off and work 2 jobs in summer to save that money. Then when school starts in fall you won't have to barrow as much. I had a friend that would come down to the city work 14hr construction 6days and sometimes 7 days all summer long. Then go back upstate to his university and use that money for tuition etc.

hope this helps some.

[selita]

What's the rate on the Parent-Plus loan? Are the terms good? Go for the loan with the lower interest rate and fees. A 3% or so difference in interest rate is no big deal for a small loan like this, but fees can really add up.

Basically, I wouldn't worry too much about $3000. In the long run it's not that much. Always make the minimum payment, plus as much as you can afford on top of that, and you will not have any large problems.

Your parents will not be stuck with the whole amount unless you skip town and leave them hanging, which is obviously not your intention. The idea is that they have to make the minimum monthly payment if you don't. That should be not much more than 1/12 of the interest rate, or about $30. Set some money aside ASAP so they'll have enough to make a payment or two just in case.

It's fair if you don't want to burden them with the worry of the loan, but it remains your responsibility even if they co-sign. And the faster you can pay it off, the better for all of you.

An amortization calculator can help you figure out exactly how fast you can pay it off, whichever loan you end up choosing.

Here's one to try:
http://www.bretwhissel.net/cgi-bin/amortize

Always make your minimum payments... and the banks will start throwing low interest rates and high limits at you to convince you to borrow more... and more... and more...

It's a trap! But it does make you feel like a valued customer. Always always pay more than the minimum unless you have no choice. And if you have no choice, borrow from Peter to pay Paul, and sell your stuff, and do without.

[TheRoof]

Originally Posted by hxt1138

I've been there basically the loan is your option. I've taken Stafford loans from fafsa you don't start repayment until 6 months after graduating. Times are tough, many students simply rack up the costs on the loans.

If you can find a university that costs less i would try that. I did my first 60 credits in a local college, and transferred to a bigger university to finish my degree. The cost is really a big difference. I was able to pay my way through the College but had to take loans for the university.

Also some professionals still have loans. Talking with my optometrist about school i told her how i didn't want loans. She told me she still had them and that actually it helps her to claim them in her taxes every year which is why she hasn't payed them off and doesn't plan to do it in a hurry. I'm not sure how accurate that is, but its something to think about.

Another option which you might not like as much is to take the loans BUT take summer off and work 2 jobs in summer to save that money. Then when school starts in fall you won't have to barrow as much. I had a friend that would come down to the city work 14hr construction 6days and sometimes 7 days all summer long. Then go back upstate to his university and use that money for tuition etc.

hope this helps some.

Wow !! Thank You about that, I am a Business Major, so this bit fascinated me. I wouldn't mind getting a tax-credit for student loans (I will have to do more research on that) Thank You So Much.

Originally Posted by selita

What's the rate on the Parent-Plus loan? Are the terms good? Go for the loan with the lower interest rate and fees. A 3% or so difference in interest rate is no big deal for a small loan like this, but fees can really add up.

Basically, I wouldn't worry too much about $3000. In the long run it's not that much. Always make the minimum payment, plus as much as you can afford on top of that, and you will not have any large problems.

Your parents will not be stuck with the whole amount unless you skip town and leave them hanging, which is obviously not your intention. The idea is that they have to make the minimum monthly payment if you don't. That should be not much more than 1/12 of the interest rate, or about $30. Set some money aside ASAP so they'll have enough to make a payment or two just in case.

It's fair if you don't want to burden them with the worry of the loan, but it remains your responsibility even if they co-sign. And the faster you can pay it off, the better for all of you.

An amortization calculator can help you figure out exactly how fast you can pay it off, whichever loan you end up choosing.

Here's one to try:
http://www.bretwhissel.net/cgi-bin/amortize

Always make your minimum payments... and the banks will start throwing low interest rates and high limits at you to convince you to borrow more... and more... and more...

It's a trap! But it does make you feel like a valued customer. Always always pay more than the minimum unless you have no choice. And if you have no choice, borrow from Peter to pay Paul, and sell your stuff, and do without.

Thank you guys for helping me, I freak out about loans. My mother does bookkeeping and she always told me dept is bad. In a sense like "Clothing" or credit cards on useless stuff that is just for entertainment. She always told me, if you can't pay for entertainment with CASH then you have to live within your means. So she struck into my head that "Dept is evil" ... I keep forgeting Student Loans are a WORTHY investment you can make for yourself. You open up doors for you, that you wouldn't otherwise.





I live with two roommates, one is out-of-state, his parents both make a combined income of 700k and they can pay off his 70,000 accrued dept just based off their interest stock option, so it doesn't even make a dent in their wallet. My other roommate is getting a free-ride to school because his dad is a physics professor for the Engineering Department.

So I feel like "I have to keep up with The Jones" type of thing, you know what I mean?

Thank you for the options, it really helps. I will do more research.