I know it will be worth it at the end...but how do I pay for it now?

February 14, 2008 12:23 PM

What steps would you recommend to prepare for financing expensive education costs?

I am returning to school to gain another BS/MS at Johns Hopkins in September 2008. The approximate cost of the first two years (BS portion) including living expenses will be $80,000. As a second degree student, I have several questions as to what steps are recommended to begin considering financing options. I will not be receiving the custom financial aid package from JHU until late April, so unfortunately I will not know what I will be receiving from the school in the form of scholarships/grants, nor will I be aware of what Federal loan aid will be offered to me, if any. I have already submitted my FAFSA online.

I have read conflicting information regarding Stafford loans (or other Federal loans) being available for those students returning for a second Bachelors, is such aid available? (I was granted $11,000 from a previous Stafford loan during my original undergrad.)

Also, in terms of private lenders, which I understand will likely make up the bulk of my loan balance, do you have any experiences with specific lenders, or recommendations for reputable lenders. I have an excellent, well-established credit history so I suspect that I will not need a co-signer.

Finally, I will be using a list prepared by my specific program to apply for scholarships of various dollar amounts, so I am prepared to work as hard as I can in the next 6 months to get as much free money as possible!

Any advice navigating this would be much appreciated! I can't yet feel fully secure in my excitement to begin my program until I realize that it can be paid for, reasonably!

Please note that I realize I am attempting to finance an expensive education, and I would appreciate refraining from comments that suggest that I go to a less expensive school, thanks.

posted by Asherah to education (4 comments total)

Not suggesting you go to a less expensive school, BUT: is it on your RADAR that the general constriction of available credit is now being reported in the area of student loans? (That's a WSJ link, which may not be there forever, so read it quick.)

You should definitely make sure your financial aid office is VERY confident that you will be able to get loans to finance your education, as I'd hate to see your $$ peter out 18 months into your program, leaving you with expensive debt, but no degree to show for it. Good luck, and hopefully other posters will have specific suggestions for you.
posted by Admiral Haddock at 12:46 PM on February 14

For your first question (about loans for second BS's), call the JH financial aid office -- they will have the latest info, and since you will be totally dependent on them, you should find out now, rather than later, if they are competent or not. (As in, the person who answers the phone may tell you incorrect information, the consequences of which will be your problem, not theirs.)

As an aside, make sure you know and are comfortable with what your monthly repayment totals will be like. Your debt load from the first two years alone (assuming no financial aid or scholarships) will be almost as much as my mortgage. I have a lot of friends who are in real problems from too much student loan debt -- they aren't in default, but they aren't buying houses, going on vacations, or saving for their kids' educations, either.

Which leads to the scholarships -- in addition to that list, ask the departmental directors of graduate and undergraduate studies (because you might be in either category, don't know how JH categorizes a person in a combined BS/MS program) if they have any suggestions of grants/scholarships/etc you should apply to. The overall list might be kind of middle-of-the-road, but your specific academic focus may remind them of other possibilities. Probably they won't have any useful suggestions immediately, but by asking them you will be the one they think of when something comes across their desk.
posted by Forktine at 1:40 PM on February 14

Thank you for the responses thus far, however please note that I am fully aware of how much debt I will be in upon completion of my program and I have already assessed in-depth, my ability and desire to pursue this course. I am specifically inquiring for how to go about this in the most reasonable and cost effective manner.
posted by Asherah at 1:54 PM on February 14

Sorry for any confusion--my post was not meant to suggest that the degree would be expensive (which you know--and based on your past posts, it sounds like you're going for degrees in nursing, an in-demand field that generally pays quite well (especially if you are willing to travel to find the big bucks)). Rather, I wanted to mention that loans may not be available at all, and that you should check with your lending office to make sure you will be able to take out loans in the first place. (Though it may all just be FUD, so take the reporting with a grain of salt).

But to further the conversation, from my own graduate experience (law) and my wife's (medicine), institutions often have a preferred private lender that offers a discounted rate. Generally, where there is a preferred lender, it may be the best game in town (leaving aside some of the recent scandals about kickbacks, etc.). You should check with the JH lending office to see if they have such a lender, as a first step. I think most lenders now just package their loans to be resold, so I don't put too much emphasis on who the originator of the loan is, except to see who will offer the best financial terms.

The preferred lender at my school was Citibank, and I found them to be reasonable (though my loans are now held by the Access Group/Student Loan People/Kentucky Higher Education Loan something or other (these are all the same entity)). I am just on a 20-year repayment plan right now, but I was offered the ability to pay interest only for a few years, or stepped rates that started lower than the then-current market, but stepped up over a period of years. The intended result was to give you more money to set up a household in the early years--if this sounds like something you would need or want, you might ask if this is available. You might also look into the availability of interest discounts for on-time payments over a certain period (i.e., after 3 years you get 50 bps reduction) or for EFT payments from your bank account.
posted by Admiral Haddock at 2:44 PM on February 14