Breaking down college costs by semester

breaking down college costsSo where did June go? I couldn’t really tell you, although I think it has something to do with multiple graduation parties every weekend. And for another few weeks I was able to avoid dealing with tuition. But July brings both a deadline and an actual bill.

The odd part is that now that the tuition is broken down into two semesters, half of the Stafford Loan is applied ($2,737) and half of the tuition benefit from my husband’s employer is deducted ($2,500), the bottom line seems manageable. (The Stafford Loan increased from our original quote, but so did Penn State’s tuition.) We are looking at roughly $4,800 remaining for each semester, which can be paid in three installments of approximately $1,600. Going back to last year when the only numbers we were seeing were the “all-told” expenses, I realize why panic loomed. And now with the actual final figures, we have determined that without unforeseen circumstances, we can pay our portion in cash.

However, what also remains are the expenses my son will need to cover: books, school supplies, telephone, groceries, bus tickets, and general living. And even with working all summer, he doesn’t have the full cash for this. We think he’ll need about $2,500 per semester (mostly bookstore). So we’re looking at a $5,000 loan for him for the year.

We are in favor of cosigning a student loan rather than securing a parent loan. Since we have divided the costs roughly at us covering 2/3 and our son covering 1/3, we’d like to keep his portion as truly his. Also, since the student loan is deferred and the parent loans are not, it feels like it makes a lot more sense to not add more immediate monthly bills.

Our first research hit the school’s web page and related links. This approach led to some of the popular lenders: Sallie Mae, Citibank, Chase, etc. but my husband was hitting each site individually and then recording the details in a separate document.

We entered www.SimpleTuition.com in the student area rather than the parent link. It was a very quick process to reach lender information and we definitely liked the opportunity to chart four different options at once. Factors we had not considered were that some of the loans are directed right to the school while others are disbursed to the student. Also, some allow a cosigner to be removed after a certain number of payments. In addition to rates and origination fees, these are valid considerations for us. After the first web sessions, we are leaning toward SunTrust and Scholar Point and likely at least one of the regional banks. My husband plans to do follow-up this week so we can get the paperwork done before the car is packed in a few weeks!

Some End of the Semester Financial Tips

Tuition Payment Plans

tuition payment plansPayment plans are offered by almost all colleges and universities as a way to spread out cash payments for the year’s expenses over several monthly or quarterly payments. At least for me, they have the psychological effect of taking the sting out of the cost. For example, a $5,000 payment upfront at one time seems (and is) really steep. But paying $500 per month for 10 months, while just as costly, eases things a little bit. I find it also trains me to better manage my budgeting. In fact, the more you can squeeze into that monthly payment, the more you should. What if, for example, you could take that $500 per month to $550? Let’s see how that 50 bucks would add up (and save you money).

Students confide their biggest mistakes. Ah, regret.

 

Understanding College Costs