Archive for the ‘loans’ tag
College Loans Unsubsidized
Is ok to obtain one of those huge $40,000+ loans? If you have taken one out, how was your experience?
This should help you understand my situation. I will be attending the University of Michigan starting in the winter 2007 semester and I do not have any money left over after attending a community college for two years while living at home. After the community college, I will have two unsubsidized loans on my tab which means they will have crazy interest building up if I do not pay them off soon. They total about $5,000 right now. I am thinking about obtaining one of those loans you see on television ($40,000) to pay for the two unsubsidized loans along with tuition and room and board (on campus)for U of M. I was also thinking of taking out a big loan because my parents make too much money to get any kind of grant money and the unsubsidized loans just aren’t enough. Also, even if I tried to win one of those scholarships from fastweb.com, it would not be enough to cover around $23,000 per year (two years for me) worth of expenses for U of M.
Note: I am responsible! Thanks!
First of all, I would be leery of any substandard loan that you see advertized on TV. Chances are, the interest is higher than what you are paying on your current unsub loans. Get all your student loans through your schools fin aid office. Most of which are sponsored by the Dept of Education. They are not in the business of making money, but helping you get quality loans for your education.
If the school isn’t offering you enough in loans grants and scholarships to cover the cost of your tuition, room and board, consider going to a less expensive school along with getting a part time job.
Good rule of thumb when borrowing is not to take more than what you would expect to earn your first year out of school. Example:
A Dr. with a total debt of $100,000 to be a okay because he would expect to earn that upon graduating. A future teacher borrowing that much would not be good unless they could expect to earn that right out of college. Highly unlikely. (Also, be aware a $40,000 student loan would earn a payment of about $425.00 a month)
You asked about experiences…
My friend borrowed $40,000 for her first year of Pharmacy school. She, like you, had 2 years under her belt and was absolutely thrilled to get accepted. But as it was, life happened and a couple of pregnancies and 1 miscarriage later she flunked out. Now she’s got nothing except a bad transcript and a $40,000 loan. Which she can’t affort to pay back. Oh, and a baby too.
The school was very forgiving and said she could get back in the program at any time, but of course she would have to fork over another $40,000 to take and pay for all those courses again. She would then have to borrow another 40K for her second year of school as well. See the cycle?
Good Luck!
Financing A College Education