How to pay for college: specific scenario

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How does one :

#1. Not make enough to qualify for aid, but yet not have any money to pay for college?
#2 have a low mortgage and still can’t swing it?

What kid of parents does this to their kid and starts them off in life with a mountain of debt? So freaking irresponsible!

We do have money saved to cover some college costs. We just can’t cover everything for OOS tuition.

It’s not like our HHI has always been what it is today. (Think: nonprofit salaries. Heck, I started out at $44k in the early 2000s.)

We didn’t have family money. Nobody helped us buy a home. Daycare is expensive. Life is expensive.

Who knew privileged people were so openly hostile and judgmental? While I’m not looking for a pity party, this thread has been very eye-opening.

Many of us have similar situations and we still managed to save the entire amount for a state school and taught our kid's common sense and college costs. I made less than you in non-profit work and still managed to save. Some of it is about life choices. No one has ever helped us...even in a real emergency and we've also paid for an SN child's private therapies and supported an elderly relative. Not all of us have privilege. We have our priorities. We take a vacation every 4-5 years at best, drive older cars, DIY our homes, buy small fixer-uppers in less desirable areas, eating out is Taco Bell, etc.

Your family sounds about as exciting as Mike Pence and his fam. OP, don't let these classless clowns get under your skin.

As Mike Tyson once said, "Social media made y'all way to comfortable with disrespecting people and not getting punched in the face for it."

Why the need for the political slur? Seriously, you folks were supposed to be working on ending divisiveness. There is no need for that. Take it to politics.

and the pp is correct. This is all about life choices. The OP wasn't clear - as every parent should be - at the START of the college tour process - of telling their child exactly what they could afford and not afford. Every single college counselor will tell you this. Then tour ONLY what you can afford. It is cruel to dangle a $84K a year private slac in front of your child if the family cannot afford it.

Then, when all the applications and responses are back, you compare financial packages. Did you get any merit? How do the private packages compare to the in-state? You, as a family, make a sensible decision that is affordable. In our case, our FAFSA efc was 100% and we received no merit from top schools so we were full pay for both kids all the way. It was a struggle but we did it

One of my friends took her DD to their financial counselor so the financial counselor could lay it all out and explain to DD that the family could not afford X, a private school, but could afford Y, in-state public. And that's where she went. By taking her to the counselor, it took the heat off of mom. A good approach.

You do not get into a situation like OP is in, which means her kid must come home, do a gap year or transfer to in-state public (which she needs to start the paperwork for now). We haven't even heard if OP can afford in-state public.

+1 to all this. I had parents who took me to a bunch of private and out of state public universities, and of course I wanted to go there vs. my rust belt state college options. In their defense, I think they were under the misguided impression that we would be given all the aid we needed, I don't think they had any clue how much colleges determine family contributions. It was a good lesson for me and we will manage expectations differently with our kids.

[Anonymous]

Anonymous wrote:If students can only take out $6k in loans a year why are all of these people walking around with $100k in student debt? I don't understand where they're getting this money.

Private (co-signed by parent) most likely, or parent-plus loans that student is expected to pay back.

[Anonymous]

OP what kind of school is this? Unless it's a top ten LAC or an Ivy, it's not worth it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It would help to know your income OP.
And how many kids do you have.

A quick FAFSA calculation says that if they get no aid for an OOS public school, their HHI is at least $250K. Or maybe a little less if they have substantial investments, in which case they're cash-rich.

This statement makes no sense. NO ONE gets need based financial aid at an out of state public school. They may get merit money but not need based aid.

This is mostly true, but not an entirely accurate statement. Merit aid is the primary channel. FAFSA filing can sometimes open up work-study or other need-based aid, sometimes. See https://www.usnews.com/education/best-colleges/paying-for-college/articles/2016-10-24/3-facts-about-aid-tuition-for-out-of-state-students. But the key factor isn’t that the school isn’t providing aid, it’s that the OP indicated that the FAFSA told them there was no aid (hence EFC was higher than OOS COA). For this to be true the combination of HHI and savings must be substantial.

NP. Well not "substantial". Anyone who has been through the process can tell you that they can get an EFC of 100%, like we did, but still be scrambling for money to pay all of the college expenses, especially with multiple kids and other factors like we had of taking care of elderly parents and SN kids. Those factors aren't included. There's an ongoing thread about at what HHI does the FAFSA computer turn off. I would say about $225. $225K in D.C. doesn't go far once you realize that over a third of that is lost to taxes. Then there is the mortgage, cars, food, etc. etc. We had to refinance our home to make it all work - and, yes, I had been saving for our kids since birth. But it still wasn't enough

It all depends on your lifestyle choices. And, yes we had to take care of an elderly parent and an SN child who was in private therapies for many years (much of which was out of pocket). Sounds like your choices were very different from ours. We live very comfortably on much less. Usually it's the mortgage, cars, vacations and other lifestyle choices. It's one thing if you have to pay for private therapies for a child or even a SN school, but OP has none of those obstacles.

[Anonymous]

Anonymous wrote:If students can only take out $6k in loans a year why are all of these people walking around with $100k in student debt? I don't understand where they're getting this money.

This doesn't make sense and a relative of my husband's has several hundred thousand in student debt. They are very secretive about it outside their go fund me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It would help to know your income OP.
And how many kids do you have.

A quick FAFSA calculation says that if they get no aid for an [b]OOS public school,[/b] their HHI is at least $250K. Or maybe a little less if they have substantial investments, in which case they're cash-rich.

This statement makes no sense. NO ONE gets need based financial aid at an out of state public school. They may get merit money but not need based aid.

That's not remotely true, particularly for private schools.

yeah, that is why I said "public school". As did the PP I was replying to.

Public schools, out of your own state, really don't award need based financial aid to most students. Any public aid they have is for their own state's students.

[Anonymous]

Anonymous wrote:If students can only take out $6k in loans a year why are all of these people walking around with $100k in student debt? I don't understand where they're getting this money.

It's usually for graduate school.

But sometimes it is because they deferred repaying and interest started compounding mercilessly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If students can only take out $6k in loans a year why are all of these people walking around with $100k in student debt? I don't understand where they're getting this money.

This doesn't make sense and a relative of my husband's has several hundred thousand in student debt. They are very secretive about it outside their go fund me.

The $6k is for the Stafford loan, the first and most common loan given to students. It’s not need based, so almost everyone gets it. It’s a “good” loan, because the payments are deferred until after graduation and it’s a lower interest rate. But there are PLENTY of private loans, with less favorable terms, that students and/or parents can take out.

[Anonymous]

Anonymous wrote:If students can only take out $6k in loans a year why are all of these people walking around with $100k in student debt? I don't understand where they're getting this money.

Here's just one example:

Debbie Baker
I returned to college in 1996 to fulfill my dream of becoming a public school teacher.

At the time, Oklahoma offered financial assistance to teachers but the program ended when I was halfway through my studies. My husband and I decided to continue with my studies since I was halfway through my four year-plus degree.

We decided to take out student loans to finish the degree required for my teaching certificate and planned on repaying the debt within 10 years of graduation. Even with two small children at home, we lived modestly and knew we would be able to repay the debt.

Having previously worked in the mortgage loan industry, I had ample information regarding lending and each year I would ask my financial aid office what my monthly payment would be upon graduation. Each time I was told “about $50 per loan”.

I assumed that my total monthly payment would be $200, but upon graduation I discovered that the figure was for each loan (subsidized and unsubsidized). That meant my payment was close to $400. After receiving my teaching certificate, I immediately went to work in the Oklahoma public school system with a beginning salary of just over $25,000.

That’s when the nightmare began, soon after my 1999 college graduation, when I graduated with approximately $35,000 in student loan debt.

Less than 90 days after graduation, I received a letter from Sallie Mae saying my loan was being placed in forbearance, as I still didn’t have a teaching job.

I was told by my loan administrators that I had “no options” for lower loan payments and that I could not make partial payments. By 2004, I contacted Sallie Mae again and told them, in no uncertain terms, that I needed to start paying my loan off. They agreed to a consolidation loan through the Federal Family Educated Loan Program (FFELP).

By that point my student loan debt had grown to $52,000 and I was really getting worried.

In 2007, I inquired about Public Service Loan Forgiveness relief.

[Editor’s Note: The PSLF Program, which was established under the College Cost Reduction and Access Act of 2007, permits Federal Direct Loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer, to have the remainder of their loan balance forgiven. PSLF is not available for loans in the FFEL Program.]

I was told I couldn’t qualify for any PSLF relief until 120 payments on my loan had been made. Instead, I was put on an Income-Based Repayment loan relief plan and I began filing paperwork as instructed on an annual basis.

While that represented progress, I continuously had problems with submitting income verification forms with Navient and Sallie Mae. Again and again, both institutions made errors that caused processing delays and caused my student loan debt to keep mounting in forbearance. It was frustrating to wait for them to fix the errors to no avail.

For example, I told Navient their IRS 4506-T forms were incorrectly put together, yet they continued to insist borrowers use those forms.

This back-and-forth scenario caused delays in processing as they changed the corrected forms I sent them. They would do what they needed to do to cause more delays, as my debt total grew. At this time, I had begun caring for my critically ill adult son and started teaching at a low-income school.

Eventually, I applied for PSLF in 2017 only to discover that all 10 years of my payments were forfeited and none of them counted toward program eligibility. I had to start my payments for PSLF all over again and I had lost $36,000 in payments.

I was really feeling boxed in.

Had I stayed in a regular payment program the forgiveness would then have been considered taxable income so I had no choice but to go another route. After all, the tax bill on $100,000 of forgiveness would be astronomical and we didn’t have enough equity in our home to pay that kind of tax bill.

Things were getting worse. After caring for my son for seven of the 10 years that I was dealing with Navient and Sallie Mae, my son passed away in the summer of 2018. They stole precious time I could have spent with him. Meanwhile, my student loan account balance has grown to $81,000 – even as I had faithfully paid on time every month.

I have sought legal advice, filed several complaints with the U.S. Department of Education, wrote letters to President Trump, President George W. Bush, Jeb Bush, celebrities, my senators, congressmen, state attorney general’s office, and reached out to media outlets. (I’ve had my story featured on CNN, CBS and Fox News.)

In July 2019, I sued Betsy DeVos and the U.S. Department of Education with the help of the American Federation of Teacher (AFT).

Today, I continue to teach in a public school system and continue to make payments of $300 per month. Almost 20 years after my college graduation and 16 years of on time payments I now owe over $81,000. It is unbelievable to me that no one at the federal level wants to help people like me.

With no bankruptcy protections, no truth-in-lending disclosures and no statute of limitations these federal loan servicers are able to run amuck and abuse college students. The price of college tuition continues to rise because these universities have their hands in the free-flowing stream of government subsidies known as the federal student loan system.

Now, I am in my 19th year as a public school teacher.

At 57 years-old, I hope to have the loans forgiven at some point in time before I reach retirement. That said, I have little hope that this will ever be resolved. I currently pay $300 a month on a loan that should have been paid off long ago and I don’t see any way out of the situation.

https://www.savingforcollege.com/article/night-of-the-living-debt-five-real-life-student-loan-horror-stories

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, how much is the Cost of Attendance right now
How much do you need to borrow?

Crazy that we went through 10 pages of responses for getting to the only actually relevant question.

OOS can mean a lot of different things. Paying for instate can mean different things. And the difference between attending UVa and the University of North Dakota.

OP needs to lay out: current cost of attendance, what the parents can pay, what the student has been approved to borrow, and any other source of funds. There's a big difference between the parents being on the hook for an extra $20k and an extra $75k. Particularly, where an equal gift may have disproportionate impact as the younger kids will be able to get investment returns on the money.

No kidding! 10 pages without helping the poor OP! It sounds to me that the desired college is $50k. First year was paid for, so 3 more to go, or $150k. OP was willing to pay just tuition (not room) at flagship instate, so maybe $10k/year? I think the student would need to figure out about $100k-$120k. It’s a significant amount for a young adult to take on. Definitely more than the lifeguarding suggestion would allow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If students can only take out $6k in loans a year why are all of these people walking around with $100k in student debt? I don't understand where they're getting this money.

Here's just one example:

Debbie Baker
I returned to college in 1996 to fulfill my dream of becoming a public school teacher.

At the time, Oklahoma offered financial assistance to teachers but the program ended when I was halfway through my studies. My husband and I decided to continue with my studies since I was halfway through my four year-plus degree.

We decided to take out student loans to finish the degree required for my teaching certificate and planned on repaying the debt within 10 years of graduation. Even with two small children at home, we lived modestly and knew we would be able to repay the debt.

Having previously worked in the mortgage loan industry, I had ample information regarding lending and each year I would ask my financial aid office what my monthly payment would be upon graduation. Each time I was told “about $50 per loan”.

I assumed that my total monthly payment would be $200, but upon graduation I discovered that the figure was for each loan (subsidized and unsubsidized). That meant my payment was close to $400. After receiving my teaching certificate, I immediately went to work in the Oklahoma public school system with a beginning salary of just over $25,000.

That’s when the nightmare began, soon after my 1999 college graduation, when I graduated with approximately $35,000 in student loan debt.

Less than 90 days after graduation, I received a letter from Sallie Mae saying my loan was being placed in forbearance, as I still didn’t have a teaching job.

I was told by my loan administrators that I had “no options” for lower loan payments and that I could not make partial payments. By 2004, I contacted Sallie Mae again and told them, in no uncertain terms, that I needed to start paying my loan off. They agreed to a consolidation loan through the Federal Family Educated Loan Program (FFELP).

By that point my student loan debt had grown to $52,000 and I was really getting worried.

In 2007, I inquired about Public Service Loan Forgiveness relief.

[Editor’s Note: The PSLF Program, which was established under the College Cost Reduction and Access Act of 2007, permits Federal Direct Loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer, to have the remainder of their loan balance forgiven. PSLF is not available for loans in the FFEL Program.]

I was told I couldn’t qualify for any PSLF relief until 120 payments on my loan had been made. Instead, I was put on an Income-Based Repayment loan relief plan and I began filing paperwork as instructed on an annual basis.

While that represented progress, I continuously had problems with submitting income verification forms with Navient and Sallie Mae. Again and again, both institutions made errors that caused processing delays and caused my student loan debt to keep mounting in forbearance. It was frustrating to wait for them to fix the errors to no avail.

For example, I told Navient their IRS 4506-T forms were incorrectly put together, yet they continued to insist borrowers use those forms.

This back-and-forth scenario caused delays in processing as they changed the corrected forms I sent them. They would do what they needed to do to cause more delays, as my debt total grew. At this time, I had begun caring for my critically ill adult son and started teaching at a low-income school.

Eventually, I applied for PSLF in 2017 only to discover that all 10 years of my payments were forfeited and none of them counted toward program eligibility. I had to start my payments for PSLF all over again and I had lost $36,000 in payments.

I was really feeling boxed in.

Had I stayed in a regular payment program the forgiveness would then have been considered taxable income so I had no choice but to go another route. After all, the tax bill on $100,000 of forgiveness would be astronomical and we didn’t have enough equity in our home to pay that kind of tax bill.

Things were getting worse. After caring for my son for seven of the 10 years that I was dealing with Navient and Sallie Mae, my son passed away in the summer of 2018. They stole precious time I could have spent with him. Meanwhile, my student loan account balance has grown to $81,000 – even as I had faithfully paid on time every month.

I have sought legal advice, filed several complaints with the U.S. Department of Education, wrote letters to President Trump, President George W. Bush, Jeb Bush, celebrities, my senators, congressmen, state attorney general’s office, and reached out to media outlets. (I’ve had my story featured on CNN, CBS and Fox News.)

In July 2019, I sued Betsy DeVos and the U.S. Department of Education with the help of the American Federation of Teacher (AFT).

Today, I continue to teach in a public school system and continue to make payments of $300 per month. Almost 20 years after my college graduation and 16 years of on time payments I now owe over $81,000. It is unbelievable to me that no one at the federal level wants to help people like me.

With no bankruptcy protections, no truth-in-lending disclosures and no statute of limitations these federal loan servicers are able to run amuck and abuse college students. The price of college tuition continues to rise because these universities have their hands in the free-flowing stream of government subsidies known as the federal student loan system.

Now, I am in my 19th year as a public school teacher.

At 57 years-old, I hope to have the loans forgiven at some point in time before I reach retirement. That said, I have little hope that this will ever be resolved. I currently pay $300 a month on a loan that should have been paid off long ago and I don’t see any way out of the situation.

https://www.savingforcollege.com/article/night-of-the-living-debt-five-real-life-student-loan-horror-stories

To answer the PPs question about how students wind up with so much debt, the link she provides above is an adult returning to college so able to acquire her own loans. For undergrad students, 17-22, it’s much more regulated

[Anonymous]

Anonymous wrote:If students can only take out $6k in loans a year why are all of these people walking around with $100k in student debt? I don't understand where they're getting this money.

Those are the limits for federal unsubsidized loans, which any student can get regardless of need. Undergrads can take out something like $57k including unsubsidized loans, which you can only qualify for if you have need.

But of course these loans accrue interest, and the unsubsidized loans accrue interest as soon as you borrow. Lots of students defer payments or do an income contingent plan. All the while the interest accrues and compounds, which is how you have people who have never missed a loan payment but then ten years later still owe the same amount.

[Anonymous]

You had too many children and your DC will forever be resentful. Can one of you get a second job?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If students can only take out $6k in loans a year why are all of these people walking around with $100k in student debt? I don't understand where they're getting this money.

Here's just one example:

Debbie Baker
I returned to college in 1996 to fulfill my dream of becoming a public school teacher.

At the time, Oklahoma offered financial assistance to teachers but the program ended when I was halfway through my studies. My husband and I decided to continue with my studies since I was halfway through my four year-plus degree.

We decided to take out student loans to finish the degree required for my teaching certificate and planned on repaying the debt within 10 years of graduation. Even with two small children at home, we lived modestly and knew we would be able to repay the debt.

Having previously worked in the mortgage loan industry, I had ample information regarding lending and each year I would ask my financial aid office what my monthly payment would be upon graduation. Each time I was told “about $50 per loan”.

I assumed that my total monthly payment would be $200, but upon graduation I discovered that the figure was for each loan (subsidized and unsubsidized). That meant my payment was close to $400. After receiving my teaching certificate, I immediately went to work in the Oklahoma public school system with a beginning salary of just over $25,000.

That’s when the nightmare began, soon after my 1999 college graduation, when I graduated with approximately $35,000 in student loan debt.

Less than 90 days after graduation, I received a letter from Sallie Mae saying my loan was being placed in forbearance, as I still didn’t have a teaching job.

I was told by my loan administrators that I had “no options” for lower loan payments and that I could not make partial payments. By 2004, I contacted Sallie Mae again and told them, in no uncertain terms, that I needed to start paying my loan off. They agreed to a consolidation loan through the Federal Family Educated Loan Program (FFELP).

By that point my student loan debt had grown to $52,000 and I was really getting worried.

In 2007, I inquired about Public Service Loan Forgiveness relief.

[Editor’s Note: The PSLF Program, which was established under the College Cost Reduction and Access Act of 2007, permits Federal Direct Loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer, to have the remainder of their loan balance forgiven. PSLF is not available for loans in the FFEL Program.]

I was told I couldn’t qualify for any PSLF relief until 120 payments on my loan had been made. Instead, I was put on an Income-Based Repayment loan relief plan and I began filing paperwork as instructed on an annual basis.

While that represented progress, I continuously had problems with submitting income verification forms with Navient and Sallie Mae. Again and again, both institutions made errors that caused processing delays and caused my student loan debt to keep mounting in forbearance. It was frustrating to wait for them to fix the errors to no avail.

For example, I told Navient their IRS 4506-T forms were incorrectly put together, yet they continued to insist borrowers use those forms.

This back-and-forth scenario caused delays in processing as they changed the corrected forms I sent them. They would do what they needed to do to cause more delays, as my debt total grew. At this time, I had begun caring for my critically ill adult son and started teaching at a low-income school.

Eventually, I applied for PSLF in 2017 only to discover that all 10 years of my payments were forfeited and none of them counted toward program eligibility. I had to start my payments for PSLF all over again and I had lost $36,000 in payments.

I was really feeling boxed in.

Had I stayed in a regular payment program the forgiveness would then have been considered taxable income so I had no choice but to go another route. After all, the tax bill on $100,000 of forgiveness would be astronomical and we didn’t have enough equity in our home to pay that kind of tax bill.

Things were getting worse. After caring for my son for seven of the 10 years that I was dealing with Navient and Sallie Mae, my son passed away in the summer of 2018. They stole precious time I could have spent with him. Meanwhile, my student loan account balance has grown to $81,000 – even as I had faithfully paid on time every month.

I have sought legal advice, filed several complaints with the U.S. Department of Education, wrote letters to President Trump, President George W. Bush, Jeb Bush, celebrities, my senators, congressmen, state attorney general’s office, and reached out to media outlets. (I’ve had my story featured on CNN, CBS and Fox News.)

In July 2019, I sued Betsy DeVos and the U.S. Department of Education with the help of the American Federation of Teacher (AFT).

Today, I continue to teach in a public school system and continue to make payments of $300 per month. Almost 20 years after my college graduation and 16 years of on time payments I now owe over $81,000. It is unbelievable to me that no one at the federal level wants to help people like me.

With no bankruptcy protections, no truth-in-lending disclosures and no statute of limitations these federal loan servicers are able to run amuck and abuse college students. The price of college tuition continues to rise because these universities have their hands in the free-flowing stream of government subsidies known as the federal student loan system.

Now, I am in my 19th year as a public school teacher.

At 57 years-old, I hope to have the loans forgiven at some point in time before I reach retirement. That said, I have little hope that this will ever be resolved. I currently pay $300 a month on a loan that should have been paid off long ago and I don’t see any way out of the situation.

https://www.savingforcollege.com/article/night-of-the-living-debt-five-real-life-student-loan-horror-stories

To answer the PPs question about how students wind up with so much debt, the link she provides above is an adult returning to college so able to acquire her own loans. For undergrad students, 17-22, it’s much more regulated

Also I think the loan limits changed at some point in the last 20 years? The person in the story initially graduated in 1999 with $35k in loans, which does not seem an unreasonable amount. But if you keep putting off payments the interest grows and grows.

[Anonymous]

So you "won't touch" your investments? That seems selfish to me.

Why take loans when you could use some of your investment $$?