College fund or loans?

[Aribottoms]

My daughter is 9 and I am starting late with saving for her college. I was going ot do a pre-paid thing but was told by several people that the less you have the easier it is to get financial aide and loans...is this true? I have NO clue about college loans so any help will be appreciated.

[lgt525]

My daughter is 9 and I am starting late with saving for her college. I was going ot do a pre-paid thing but was told by several people that the less you have the easier it is to get financial aide and loans...is this true? I have NO clue about college loans so any help will be appreciated.

 

Hi Aribottoms,

 

Prepaid tuition is still a lot better than student loans. If you lock in a tuition price now (when your daughter is 9) you will be paying WAY less for tuition than when she is 18. Non-loan financial aid (pell grants for example) in my experience only goes to people whose parents do not make much money at all, unless the scholarship is merit based, in which case you would get the money regardless of income.

 

I think it is a great idea to get into a pre-paid tuition plan now. You will save tons of money on tuition by locking in a price that is going to be much cheaper than what tuition will cost 9 years from now.

[Aribottoms]

So basically loans are hard to get unless you have no money? Is that why most students get their own loans? If I go the pre-paid college program I am starting late and would have to put a big chunk down ($5000) since my kid is already 9. She has a ton of savings bonds too.

[Cheech]

Student loans aren't hard to get - they're just hard to pay off. Colleges also give grants that don't have to be paid back, but total family income has to be really, really low to qualify. I had grants and scholarships in college and *still* had to take out loans to cover all my costs. Grad school pretty much put me under. I'll be paying on my student loans til I'm old and gray (well I'm already getting gray.. lol).

 

I totally agree with lgt525. Pre-paying buys you college tuition at today's prices. God only knows how much it'll cost by the time your daughter gets to college. There are other savings options too - bonds, other investments, etc. I think there is some IRS thingie where you can put aside money to pay for education (sorta like a 401k, but for school). If I knew then what I know now, I'd take less hours and work to pay at the time I went to college rather than take student loans. When I was young, it sounded so easy. Living with that decision isn't.

 

I think you're such a great parent to be thinking of your daughter now and trying to really make a great future for her.

[Aribottoms]

Thanks Cheech! I am trying to do best by my daughter and give her a fighting chance. I now have to call and get the program started with pre-paid. I might only be able to afford a few semesters but it is something, right?

[CALady]

Hi Aribottoms, can you send me the link to the prepaid tuition you're thinking of getting for your daughter? Thanks!