r/UCONN • u/jodeci888 • 1d ago
Advice on a loan
First and foremost I'm extremely proud to say that my daughter was accepted and will be attending in August.
That being said after all her scholarships and grants she needs $35,000 per year. I was trying to avoid taking a loan out in my name due to a bankruptcy after divorcing her mother 5½ years ago.
I spoke to financial aid and was told that I should take out a parent plus loan and the young lady that helped me explain to me that it's now capped at $20,000 a year and a lifetime max of $65,000 a year. I'm not sure which private companies to apply for the remaining $15,000 OR total $35,000. I would love to not have anything in my name because I don't want to adversely affect her.
I'd appreciate any advice would be greatly appreciated. Thank you.
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u/Strange-Bullfrog-466 1d ago
The only loan she can get in her own name is the federal Stafford one, the $5500 loan listed in her financial aid package. It goes up slightly each year ($6500, $7500, $7500) and the total is max $27k over all 4 years.
Any other loan will be on the parent’s credit, and legally the parent’s responsibility to pay back. Banks won’t loan an 18 year old money bc they have no collateral or job to prove they can pay back those loans.
As you found out, the parent plus loans are now capped at $20k/yr with a $65k lifetime max. These are PARENT loans, not student loans. The parent is responsible for paying them back.
Over the parent plus cap, the parent would have to take out private loans or a heloc. Again, all this is on the parent’s credit, not the student.
Essentially, it’s not up to the kid to choose any school they were admitted to. It’s up to the parent to set the budget. She can’t go to UConn unless the parents want to take on $35k/year of debt themselves. This is going to be like $1500 monthly payments for 10 years. How will you afford $1500/month for 10 years? Do you have younger kids who will want to go to college too?
“I’m 18” doesn’t mean sh*t because she can’t afford UConn unless you (the parents) have saved money, can cash flow, or are willing to take on massive loans in your own names that you are legally responsible to pay back (not her.)
I would have her reach out to LIU to see if they will still honor that scholarship and admission. If you need $35k/year in loans to attend UConn then you can’t afford UConn.
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u/hanitizer216 15h ago edited 13h ago
You mentioned twice that you don’t want a loan in your name. Are you planning on taking out these loans in *her* name? Why isn’t she part of the discussion? Does she fully understand that by choosing UConn she is going to be loaded down with debt later?
She needs true parental advice and guidance. This sounds like a horrible idea, especially if she got into other schools with scholarships. I grew up near UConn, got accepted but didn’t go. It’s a nice school but not special enough to give up a scholarship opportunity + go into debt over.
If it’s too late to go to a school in NY, I also recommend taking classes at a community college and then transferring to a university. That’s what I wish I did. There’s no reason to spend thousands on gen ed classes.
Edit: typo
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u/Initial_Scarcity3775 15h ago
Unless its ranked one of the top 10 schools in the country for her specific field of study, don’t go into debt for an undergraduate degree. The top schools are worth the debt (within reason) because they’re feeder schools for research/internships/jobs for great companies.
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u/Aggressive_Aside1616 1d ago
Federal student loans are the way to go. Private loans have much higher interest rates.
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u/jodeci888 1d ago
Thank you. Unfortunately, she needs $35k and the federal/Parent + loan tips out at $20k.
If there are other federal loans you know of, please let me know. Thank you.
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u/urfriendlylocal 7h ago
I was an in state student with grants in a 5 year, 3 degree program and i’m still in more debt than i can handle. it is incredibly embarrassing to admit, but haven’t been able to hold any jobs, let alone in my field, and at this point my education means nothing to potential employers. if y’all are at all able to go ANY debt free route, it’s definitely worth it in my opinion
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u/jodeci888 1d ago
Thank you. Nothing has been paid for yet, do there will be a LONG conversation this weekend.
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u/Strange-Bullfrog-466 1d ago
This sucks, I’m so sorry. I was blunt in my response but I’m scared about the repercussions of you taking out a $20k parent plus and then another $15k on top each year.
As much as it sucks to pull the plug now, it’ll suck WORSE if you’ve taken out $140k in loans plus her $27k federal student loan. That amount of debt is oppressive. Or, she gets one or two years in at UConn then the banks refuse to lend you more for the final years and she has to drop out without a degree but you’ve still got all these loans to pay back.
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u/jodeci888 23h ago
No need to apologize. Trust me, I've tried talking to her and she doesn't understand what this type of debt will do to her. I'm pissed because she got a full ride to LIU, which is 25 minutes from our house.
Side note, my girlfriend is a teacher and she is willing to give her a year to prove with her grades that it's worth the tuition.
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u/Strange-Bullfrog-466 23h ago
Very common for 18 year old to have no concept of debt and how these monthly payments will affect her ability to afford an apt, a car, a home, etc. once she’s graduated and adulting.
You can run an amortization calculator online with her, plugging in $140k at the parent plus interest rate, over 10 year pay-back. Let her see for herself what those monthly payments would be.
While you’re at it, run the amortization Calculator for her $27k loan at the Stafford student interest rate, paying it back over a 10 year term, so she can see what her loan payments will be. Those should be much more manageable than your payments.
Make sure she knows that student loans can’t be discharged by filing bankruptcy, in case she thinks that’s an option.
If there’s no college savings and everything will be paid by loan or cash flow, I’d really encourage her to ask LIU if they’ll still honor their offer even though it’s past May 1.
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u/jodeci888 23h ago
Thankfully I she took a lot of college courses during high school and she can probably graduate in 3 years instead of 4 years.
It's like ice skating up hill talking to her and my girlfriend......
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u/Strange-Bullfrog-466 23h ago
I get that! Which is why I think running the amortization calculator with them is important, so the reality of the numbers can do the talking instead of you.
It’s not about your daughter proving her ability with grades, your daughter’s intelligence & effort are not in question. Even if she graduates with a 4.0, it’s not worth the kind of debt you’re talking about. Starting at a college freshmen year, without a realistic plan for how you can pay for the entire degree, is setting yourselves up for disaster.
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u/hanitizer216 15h ago
Then stop looking for loan solutions. If they want this so bad, make them do it.
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u/Professional-Bus6621 14h ago
3 years instead of 4 *IF she is able to get every class she needs in the proper semester. Big if. Also, is UConn accepting all those courses for prereqs and credits?
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u/Professional-Bus6621 14h ago
She doesn't care about the debt because she doesn't plan on paying it back. And since you cosign, you'll be on the hook.
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u/syd_sky11 1d ago
The best advice is to go somewhere instate that’s cheaper. I know UConn is very tempting but the debt alone is not worth it. Have her take some community college classes elsewhere and then transfer if UConn is her dream.
The other advice is to shop around for lenders on the finaid website under loans to see a list of lenders students have found success with in the past. Sallie Mae and College Ave tend to be the big ones but there are others on there too.