Pay for college with loans or cash...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Look for cheaper schools.

That didn't help at all and didn't answer the question. Not interested in going to a cheaper school.

IF, and only IF, she plans on taking a govt or non profit job, finance everything. She will then be eligible for income based repayments (10% of income) and 100% forgiveness in 10 years. She could easily come out 50- 75K ahead doing this.

Thank you this helps. Niece is going to school either using trust money or loans. She is not considering going to a cheaper school.

And to the PP who wants the Audi, hey if you got the credit go for it! YOLO!

What is wrong with cheaper schools? You seem very defensive, OP.

+100

Apparently, niece wants what she wants, regardless of financial circumstances and aunt is just fine with that. What a waste of advice.

Maybe the niece is old enough to learn that you don't always get exactly what you want, and sometimes a course adjustment is necessary.

This whole topic of paying for college is a pet peeve of mine, what with recent (empty) promises of free college for everyone. There are so many ways to earn an undergraduate degree at a fraction of the sticker price. Here's what someone I know did:

- Went the first two years to community college, covered entirely by Pell grants.
- Took a "gap" year (at age 20) and got a full-time job, the earnings of which went to the college fund, while living at home.
- Because she finished her AA degree with excellent grades, she was offered a 1/3 tuition transfer scholarship to an out-of-state four-year school for her remaining two years (as long as she maintained a B average.) That scholarship, together with the job earnings, covered tuition and room/board for year 3.
- She had her partial scholarship for year 4, and on the hook for just the remaining 2/3rds of year 4. She graduated only one year "behind" schedule (the gap year), with high honors.

[Anonymous]

OP,
A couple things:
1. I can't tell you how many people I graduates from HS with were going to become doctors. Only 2 of them are actually doctors.
2. In lieu of number 1, deal with the 4 years of college now and the money she has now. You have no idea what graduate school or scholarships or opportunities she may or may not have. What you do know is that she is dead set on an out of state school and has personal money to the tune of $100k to pay. So as an adult now making this decision she pays as she goes.

[Anonymous]

perhaps she filled out the FAFSA wrong. If the trust assets are in the student's name, she would be expected to pay about 25% of assets per year towards college. If the assets are owned by a trust, the EFC should be less

[Anonymous]

OP,
The bottom line seems to be that your niece has made this decision, regardless, and now will have to decide if she wants to take loans out and use the $100k to pay them back, or pay as she goes. I hope the other aunt in charge is wise enough to not allow the niece to use the money to buy a fancy car or take vacations. However, that ball is not in your court.

The only thing you can do is
1. Review the FAFSA form with her and make sure she gets the financial aid she is entitled to
2. Show her how much of the $100k she will have after 4 years of college, point out room, board, books and then compare it with that same amount after 4 years broken down into monthly payments, and a sample budget for, say, a $50k/year job. Get into a discussion about entertainment money, a car or transportation, and lay out some numbers for her. Talk about getting a job, will she pay you for food, etc. It seems like no one has had this discussion with her
3. This is the hard one: you have to let her decide. But SE number 2 above, you will have given her facts.
After that, she is no different than the millions of students drowning in student loan debt and little income if she doesn't choose a major wisely and blows money either way.
Judging from the fact that she is insisting on this college and didn't even apply to any cheaper schools BEFORE she knew about the money, you have an uphill battle. But perhaps you can do a really good job spelling out how much money different careers make, look into what it actually takes to get into medical school, alternate career paths, and what crushing student loan debt looks like.

[Anonymous]

Anonymous wrote:OP,
The bottom line seems to be that your niece has made this decision, regardless, and now will have to decide if she wants to take loans out and use the $100k to pay them back, or pay as she goes. I hope the other aunt in charge is wise enough to not allow the niece to use the money to buy a fancy car or take vacations. However, that ball is not in your court.

The only thing you can do is
1. Review the FAFSA form with her and make sure she gets the financial aid she is entitled to
2. Show her how much of the $100k she will have after 4 years of college, point out room, board, books and then compare it with that same amount after 4 years broken down into monthly payments, and a sample budget for, say, a $50k/year job. Get into a discussion about entertainment money, a car or transportation, and lay out some numbers for her. Talk about getting a job, will she pay you for food, etc. It seems like no one has had this discussion with her
3. This is the hard one: you have to let her decide. But SE number 2 above, you will have given her facts.
After that, she is no different than the millions of students drowning in student loan debt and little income if she doesn't choose a major wisely and blows money either way.
Judging from the fact that she is insisting on this college and didn't even apply to any cheaper schools BEFORE she knew about the money, you have an uphill battle. But perhaps you can do a really good job spelling out how much money different careers make, look into what it actually takes to get into medical school, alternate career paths, and what crushing student loan debt looks like.

OP Here. Thanks for this. For those that remarked that I gave niece bad advice. I told her this was a bad idea, but her mind was made up and I don't argue with children (or adults). I don't understand what you all think I could have done? I couldn't make her choose community college or an instate school. It's her money! As much as I want to act as a parent and make this decision for her, I could not. I honestly think she choose this school was in order to be closer to my family. Even though she lived about 4 hours from me while in high school, we spoke almost daily and she visited me on all all school holidays and breaks. She is not close to money holder aunt or anyone from her deceased mom's family. The initial problem was this, her father due to his job loss, was only staying in place A until niece graduated from high school. As soon as she graduated, he moved with (along with another child) back to our home state. So niece didn't want to apply at any schools in place A because dad and sibling would be moving 1000 miles away. So even if she followed them, she be paying OOS tuition. She would be completely alone if she stayed where she was. I understand why she didn't want that. I didn't even know she applied to the school in my state until she was accepted. Other than being stubborn, she has a very good head on her shoulders. I don't think she will use this money for anything except school needs.

As you said above, the ball has never been in my court on any of this. I am only trying to advise her and make suggestions. She is 18 years old makes her own decisions. She has a job, my brother plans on buying her a car next summer after freshman year. I'm trying to lay out options now that we have landed here.

[Anonymous]

OP - I think you're a great aunt. Don't let these anonymous trolls get you down. You are in between a rock and a hard place with regard to helping your niece. She is an adult now and must make decisions on her own. However, you should also guide her because she is still even - 18 years old may be considered adult in our society, but it's still young!

Rather than rely on the guidance of people on this board, I would suggest you try and do some research yourself and then seek a professional in your area that can give you some guidance. I don't have any particular advice other than to try and keep the loans to a minimum. Also, make sure to read all of the fine print on any loans that are taken out. You don't want your niece to discover too late that she signed off on something unreasonable. It sounds like she is going to have to expect to take out some loans, but she should also research scholarship opportunities and other sources of revenue that could help her. It's a big job, but if she is determined to go to medical school then she needs to work hard.

You also need to truly research how she can become a resident in your state in order to get in-state tuition. Every state's requirements are different so you need to research that. It would be ridiculous for her to pay for 4 years of OOS tuition if she can qualify for in-state, even if it's only for a few years. If she continues on to medical school she should consider attending the medical school in-state also, unless she gets financial aide/scholarship money later.

Your niece is young now and probably believes that 100K will cover everything for her education, but she is wrong. Sadly, it will not even get her through her undergraduate degree....she may need to sit down with a professional money manager who will put it all in perspective for her. Do you know anyone who does this and is willing to work with you pro bono? Money managers often charge hefty fees so I wouldn't advise seeing one and paying their fee, but hopefully you can find someone.

Good luck!

[Anonymous]

19:55 had great ideas. I definitely think the talk about real world costs needs to be had.

I had a mixture of loans and cash for law school (I had an athletic scholarship that covered all of undergrad). I took out a loan for my first year of law school and then got in-state residency and paid cash for the last two years of school. (This is where going to a cheaper school really comes in handy!) I graduated with $18,500 total student loan debt which has been long paid off. For what it's worth--and I know you know this--going to a state school vs. fancy private school did not hinder me getting a job whatsoever.