For parents who are primarily paying for college with non need based loans...

[Anonymous]

Is it possible for those who do not qualify for or apply for financial aid to still take out federally guaranteed student loans? What is the process?

[Anonymous]

Anonymous wrote:Donut hole is like this - yes, middle class people making 200-300 K can in theory save enough for a few kids to go to "private" college (but considering their income, is it wise to shell out so much on undergrad for a private when the money can go so much further in other scenarios (such as choosing public for undergrad, then having more to help with grad school?). It kills me when I hear parents say stuff like "grad school is on them" - I paid for Oberlin or whatever - and then they talk about how poor Johnny is and all of his debt. Yes, I'll say it - you are screwing your kid if they come out of Medical or Law school with $200,000-$300,000 in loans, and god forbid you saddle them with big loans for undergrad. You want to retire eventually right? There is no shame in this sort of reasoning - I wish people would stop using the term donut hole to justify why they "can't" pay for this or that, and being so defensive about it. It's a lot of money to shell out and in most cases does not make sense if your means are limited in the long run. Call it what you want, but practicality about college and grad school enabled our kids to come out of two top-10 grad programs debt free thanks to excellent grades, merit scholarships and some long term planning. They listen to what their friends are dealing with and are very thankful to have freedom and flexibility in their life choices vs. being shackled with debt.

Those are not middle class. We make far less and have saved no issue.

[Anonymous]

Anonymous wrote:I think this is crazy. Why are the parents taking out loans instead of the student? DH had one of these parent plus loans and it was really annoying. The rate was sky high. He went to a state school and basically slummed it through college, plus worked prestigious high paying jobs during the summers. He actually shared a bedroom all 4 years plus shared a bathroom with like 5 guys. But his parents didn't save anything or give him anything for college, so he had to take out a parents plus loan.

His job eventually repaid his student loans, but not his parent plus loans. Those couldn't be rolled in.

Federal loans issued to the student have limits. The freshman year limit is $5500. If the student needs more money than $5500, they need a co-signer. Remember that students have no income or assets. If you are the co-signer, your name is on the hook for the loan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think this is crazy. Why are the parents taking out loans instead of the student? DH had one of these parent plus loans and it was really annoying. The rate was sky high. He went to a state school and basically slummed it through college, plus worked prestigious high paying jobs during the summers. He actually shared a bedroom all 4 years plus shared a bathroom with like 5 guys. But his parents didn't save anything or give him anything for college, so he had to take out a parents plus loan.

His job eventually repaid his student loans, but not his parent plus loans. Those couldn't be rolled in.

Federal loans issued to the student have limits. The freshman year limit is $5500. If the student needs more money than $5500, they need a co-signer. Remember that students have no income or assets. If you are the co-signer, your name is on the hook for the loan.

A parent plus loan is not co-signed. It is borrowed by the parent solely. The parent is 100% on the hook to pay (and their credit is the one that is dinged of not, wages garnished, etc.) and the child doesn’t have to pay a dime. The loan cannot be transferred to the student/child at any point.

[Anonymous]

Anonymous wrote:Is it possible for those who do not qualify for or apply for financial aid to still take out federally guaranteed student loans? What is the process?

You don't have to qualify for need based aid in order to take out the fed. loans, but you do have to file a FAFSA to get access. We knew we'd be full pay but still submitted the form, and sure enough on every single financial aid package the unsubsidized federal loan was the only thing listed other than any merit awards received.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is it possible for those who do not qualify for or apply for financial aid to still take out federally guaranteed student loans? What is the process?

You don't have to qualify for need based aid in order to take out the fed. loans, but you do have to file a FAFSA to get access. We knew we'd be full pay but still submitted the form, and sure enough on every single financial aid package the unsubsidized federal loan was the only thing listed other than any merit awards received.

Forgive my lack of knowledge but we have our oldest starting college this fall. We did not complete a FAFSA because we knew we would be full pay. However I would still like our child to take advantage of the federal student loans. Is it too late ?

[Anonymous]

Call the school and ask your question. The FAFSA is completed annually, NOT just a one and done.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I really hope no one is doing this.

We are selling our house instead in this crazy market

And no, we will not be turning down HYPSM. It will pay for itself eventually.

Not necessarily. I know tons of HY types who work for the government. Huge waste of money, IMO.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I really hope no one is doing this.

Tons of donut hole families pay for college primarily through loans. Both my parents and DH parents funded our educations this way.
They paid off the loans within a few years of their kids’ graduations.

There are no donut families. They code not to save. Bad move.

This is not true. What people fail to realize that complain about donut hole families is that the expectations for what one can pay are based on current salary. Sure, if we had been making 200K since DC was born, we could have. But, we, like most donut hole families, have not. If the calculators would take into account even the last 10 years, you would hear a lot fewer complaints.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is it possible for those who do not qualify for or apply for financial aid to still take out federally guaranteed student loans? What is the process?

You don't have to qualify for need based aid in order to take out the fed. loans, but you do have to file a FAFSA to get access. We knew we'd be full pay but still submitted the form, and sure enough on every single financial aid package the unsubsidized federal loan was the only thing listed other than any merit awards received.

Not only that, but as noted above, the federally guaranteed student loan limit for a first year student is $5500, or approximately 7 percent of the cost of a year at Yale.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is it possible for those who do not qualify for or apply for financial aid to still take out federally guaranteed student loans? What is the process?

You don't have to qualify for need based aid in order to take out the fed. loans, but you do have to file a FAFSA to get access. We knew we'd be full pay but still submitted the form, and sure enough on every single financial aid package the unsubsidized federal loan was the only thing listed other than any merit awards received.

Forgive my lack of knowledge but we have our oldest starting college this fall. We did not complete a FAFSA because we knew we would be full pay. However I would still like our child to take advantage of the federal student loans. Is it too late ?

It's not too late. Fill out the FAFSA and then alert the college that you will be paying in part with a student loan.

Note that if you aren't qualified for a subsidized loan, interest on the loan begins to accrue immediately.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I really hope no one is doing this.

Tons of donut hole families pay for college primarily through loans. Both my parents and DH parents funded our educations this way.
They paid off the loans within a few years of their kids’ graduations.

There are no donut families. They code not to save. Bad move.

I don't know any "donut" families who haven't saved for college. What they haven't done (haven't been able to do) is save enough to be full-pay at a private colleges.

I consider my family to be a donut family. We've saved quite a bit for college and were able to pay $35k-$40K/year for 4 years for DC1 to attend college, and now will be able to pay $40k-$45k/year out-of-pocket for DC2 to attend college, no loans involved for either. (With DC1 graduated and living on their own, we actually could pay somewhat more for DC2 if necessary.) But our EFC is about $60k and that's way too steep for us. That's the donut hole. Since we weren't willing to borrow money and didn't want our kids to do so either, it limited the schools that our kids were able to consider. Not complaining (as I don't expect families at our income level to be given need-based aid), just stating facts.

[Anonymous]

Anonymous wrote:Is it possible for those who do not qualify for or apply for financial aid to still take out federally guaranteed student loans? What is the process?

No. Private loans can be taken out by anyone.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I really hope no one is doing this.

Tons of donut hole families pay for college primarily through loans. Both my parents and DH parents funded our educations this way.
They paid off the loans within a few years of their kids’ graduations.

There are no donut families. They code not to save. Bad move.

I don't know any "donut" families who haven't saved for college. What they haven't done (haven't been able to do) is save enough to be full-pay at a private colleges.

I consider my family to be a donut family. We've saved quite a bit for college and were able to pay $35k-$40K/year for 4 years for DC1 to attend college, and now will be able to pay $40k-$45k/year out-of-pocket for DC2 to attend college, no loans involved for either. (With DC1 graduated and living on their own, we actually could pay somewhat more for DC2 if necessary.) But our EFC is about $60k and that's way too steep for us. That's the donut hole. Since we weren't willing to borrow money and didn't want our kids to do so either, it limited the schools that our kids were able to consider. Not complaining (as I don't expect families at our income level to be given need-based aid), just stating facts.

Our family is going to be in this situation in two years and I have been starting to research what we can afford based on savings and cash flow only. I don't have SAT scores to qualify for merit yet and am not counting on that but it will be great if DC can get it. I was surprised to see how many schools, even more affordable privates, we could afford without any type of loan. I haven't even called a financial aid office yet but when I do, hopefully it will give DC more options. Saving in 529s aggressively really is necessary for middle/upper middle class families.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I really hope no one is doing this.

Tons of donut hole families pay for college primarily through loans. Both my parents and DH parents funded our educations this way.
They paid off the loans within a few years of their kids’ graduations.

There are no donut families. They code not to save. Bad move.

This is not true. What people fail to realize that complain about donut hole families is that the expectations for what one can pay are based on current salary. Sure, if we had been making 200K since DC was born, we could have. But, we, like most donut hole families, have not. If the calculators would take into account even the last 10 years, you would hear a lot fewer complaints.

If you are making $200K a year, you are not a donut hole family and can comfortable pay for at least a state college and grad school. When we were at $100-120K we bought our newborn the prepaid and then paid that off and started a 529. We have never hit more than $140K and now have enough saved for the state school, room/board and 1-2 years of graduate school. If we continued to save, which we aren't we could do even better. You are making excuses fo your life style choices. We live in a tiny sh@t shack that we mainly DIY/paying cash, drive our cars till they die or are unsafe and then save and pay cash. We only take vacations every 4-5 years and don't spend a lot. In that time, we've had a child with serious SN and paid privately for therapies and had to support my MIL for many years. Plus, some other bad things happen. And, now that you are making $200K you should have changed your lifestyle and put that extra money int savings. I'm so tired of rich people like you expecting others to fund your lifestyle choices.