Parent PLUS loan vs other options for my daughter's freshman year - need advice

I went through this last year with my son! Few things to know about Parent PLUS loans: - Higher interest rates than Federal Direct loans (currently 8.05% compared to 5.50% for undergrad loans) - Credit check required but not as strict as private loans - YOU are responsible for repayment, not your daughter - Full cost of attendance can be borrowed minus other aid Key question: do you want to take on the debt yourself or have your daughter be responsible? Direct loans in her name are capped at $5,500 for freshmen, so that won't cover your $18k gap. Private loans are another option but usually have variable rates and fewer protections. We ended up doing Parent PLUS for half and having our son take private loans (with us as cosigners) for the rest to split the burden.

i got parent plus loans for both my kids and REGRET IT SO MUCH!!!! the interest is crazy and they don't qualify for most of the forgiveness programs that student loans do. plus they starting making me pay back while my youngest was still IN college!! wish i had just cosigned private loans with better rates

Have you looked into the CSS Profile schools? My daughter got way more institutional aid from schools that required CSS Profile than just FAFSA. It's not too late to apply to some schools for fall with better aid packages.

Before you commit to any loans, call the financial aid office directly and explain your situation. Many schools have additional institutional funds they can offer if you explain your circumstances. My daughter's SAI was also higher than expected, but when I explained our actual financial situation (ongoing medical expenses not captured on FAFSA), they found an additional $5,000 in grants. I spent three days trying to reach someone at financial aid during decision time. Frustrating, but when I finally got through, it was worth it. If you're having trouble reaching them, I used a service called Claimyr (claimyr.com) that got me connected to a real person in about 10 minutes instead of waiting on hold forever. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ Regarding loans - Parent PLUS does have income-contingent repayment options if you consolidate them later, which private loans don't offer. Important to keep in mind.

My daughter is graduating next month and we used a mix of Parent PLUS and private loans. One thing NOBODY told us: if you take Parent PLUS loans, check if you qualify for the REPAYE plan after consolidating. We're saving $340/month this way!!! Also consider how much total college will cost for ALL FOUR YEARS. Our biggest mistake was not planning the full amount. Every year we had to scramble to find more money as tuition went up.

dont forget to check if your employer offers any college benefits! my company gives $5k/yr for dependents education and i didnt even know about it until my daughters sophomore year!

We're finishing year three with two in college. Our approach: 1. Students take max federal direct loans ($5,500 freshman, $6,500 sophomore, $7,500 junior/senior) 2. We pay what we can from savings/income 3. Parent PLUS loans for remaining gap 4. Students work part-time during school (~10 hrs/week) and full-time summer to cover books and spending money For us, the federal protections of Parent PLUS outweighed the higher interest rate compared to private loans. If something happens to me or my job, there are deferment options not available with private loans. Also, has your daughter looked for additional outside scholarships? Many local organizations offer $1-2k scholarships that can help reduce the gap.

Something else to consider: look at the loan fees. Parent PLUS loans currently have a 4.228% origination fee that's taken from the loan amount. So if you borrow $18,000, you'll only receive about $17,239 - but you'll repay the full $18,000 plus interest. Private loans typically have no origination fees, which can make a meaningful difference in the total cost over time, sometimes offsetting the higher interest rate. Also, since your daughter is pursuing engineering, consider that her earning potential after graduation will likely be strong. This might make it more reasonable for her to take on some of the debt burden through private loans (with you as cosigner) that you could help her repay later if needed.

does anyone know if parent plus loans affect your debt-to-income ratio for mortgages?? we want to downsize next year but have 45k in plus loans

I think everyone should be calling Congress about these ridiculous college costs instead of going into debt! In the 80s my parents paid my tuition from their regular salaries. Now we're all talking about taking out MASSIVE loans like it's normal. It's not normal!!!

As someone who works in financial aid administration, I want to add a few key points that might help with your decision: 1. **Appeal Process**: Definitely call the financial aid office as others suggested, but also submit a formal appeal in writing if your family's financial situation has changed since filing FAFSA (job loss, medical expenses, etc.). Many schools have additional institutional aid they can award through appeals. 2. **State-specific programs**: Check if your state offers any grant programs for residents attending in-state schools that you might have missed. Some have later deadlines or supplemental applications. 3. **Payment plan options**: Many schools offer interest-free monthly payment plans that can help spread costs over 10-12 months instead of taking loans. This might reduce how much you need to borrow. 4. **Tax benefits**: Don't forget about the American Opportunity Tax Credit (up to $2,500/year) and potential state tax deductions for college expenses - these can offset some costs. Given your situation, I'd suggest: maximize her Direct loans first ($5,500), explore private loans with you as cosigner for better rates, and use Parent PLUS only as a last resort due to the higher rates and fees. The key is keeping total debt reasonable across all four years - engineering programs often require 5 years, so plan accordingly!