Paying for college
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| Sat, 03-28-2009 - 9:44pm |
This isn't intended to address the issue (nor start a debate )of whether or not we should pay for our children's college education, that's an individual choice each of us need to decide for ourselves and families.
Our DD has one more year of HS we have some saved and have decided we want to pay for her education at a state university and are starting to look at various options. Like I said we have a chunk saved but not enough and we are in the process of getting out of some consumer debt, our income is in the lower six-figures so we will not be eligilble for grants. I realize there are loan options however would we be better off having her take out the loans and us paying for them or is it usually better for us to take parent loans.
Anyone going through this currently????
Thanks,
Susan

We pay for half of our daughter's out of state tuition each semester
I'm assuming since your income is six figures it is not income based. A few questions. Are you getting a pretty good interest rate and
No, the loans are not income based -- you get a small break in interest rates if you have the payment automatically deducted from your bank account.
Our son has two more years of HS left so we are not far behind you.
My daughter is a Junior as well, and is looking at both state schools and one private school, because it does have a perfect curriculum track for her.
We estimated costs at $105,000 for 4 years which includes tuition, room/board and spending at a public school, or tuition and spending at the private school. I have saved only about 10% of that due to a divorce and financial hardships a few years ago.
We have a son following a year later, so what we do for one, we must do for the other.
Again, we make six figures and will not be eligible for financial aid, but we decided to to put in $1k a month or $12k a year. That would give her $48k, plus the $10k we have now or $58k. We expect her to have a part-time job during college to support her spending money. I don't know if her father will help, but the rest will probably come from student loans.
She is adamant on a health care career, so what a relative who is an HR director at a hospital told us, was to let her take loans. Many times the hospitals will do some loan reimbursements as hiring incentives. They won't do it for parent loans.
The student loans also put my daughter in the game. I was an all A student with a 29 ACT, and went to a big 10, top 5 university, but I went a bit wild my freshman year. Having loans myself during sophomore year made me feel a bit more serious about my studies. I think every child is different, but that could be something to consider.
I fully expect to help her pay the student loans if need be. My loans on my MBA are at 5.25%, so not that bad as far as interest, which is tax deductible, but I do not know where that cut off is, as we might be over that now as well.
Oh, to save on credits she is taking 3 AP classes next year, and will take CLEP tests to see if there is anything she can test out of (she is accelerated and has physics and calc this year.) She also plans to take credits at the community college, or the college I teach at in the summers to transfer those in as I did when in college.
I would advise any student to take as many college courses as possible during high school, so you don't have to pay for them during college, if the student is eligible and can handle the rigor. Many freshman are coming in with as many as 12 credits before even starting, my nephew had 48!
-Marie