Basically, I'm in community college right now. I have next semester paid for by a scholarship and have enough saved up to pay in cash for next semester (although I'm still applying for scholarships, so hopefully that'll be covered as well).
The plan was to keep applying for scholarships and cover the difference with student loans. I'll be traveling to the college campus and I live with my SO in an apartment, so the only thing I would be paying for would be tuition, books, and other fees (everything but room and board). 30 hours per semester, the school says tuition would cost about $8,000 per year. I was fine with taking out loans (this would be about $30,000 in loans within the course of 3 courses for 6 semesters).
My SO, who already has her degree, no debt, no car payment, and makes substantially more told me that she would rather help pay for my tuition. She can save up $900 per month towards tuition, which would be enough to cover every year if I attend school full time. Her end goal, by the time we get married, would be to have a down payment towards a home. Originally the plan was for me to take out loans, and she can contribute towards the down payment while I take out loans. I told her that school was my debt and that I would be uncomfortable with her paying it.
But, she spoke with her mom (financial advisor) and came up with an alternative plan:
Rather than me taking out loans, with an average of 6.50% interest rate, she would pay for tuition with minimal loans taken out/any scholarships gained to lessen that amount and/or pay her back. With the $30,000 total cost at 6.50% [these are all rough estimates] we would save about $6000 from the principal and interest.
Once I am out of school and debt free, my CS degree (granted I get a job in the field) should yield $55,000 minimal, an 80% increase of what I already make a year. I could easily match her contributions to a house down payment (if we were both contributing $1,000 per month, we could have a house payment within 2 years time).
If we were to take out student loans, I would not be able to contribute to the house (currently only working 30 hours a week to go to school full-time) until after the fact, and that's with the student loans I would need to pay off. So I would maybe contribute half that amount. We'd still get to the house in time with her already established contribution (if she were to contribute $1000 per month), but the difference is that we'd be $6,000 less at the end with student loans.
Although my credit score is good (750), we would have a more difficult time getting a mortgage with student debt in my name.
So, I'm not sure what to do. I told her that I would be uncomfortable with her paying my student loans, but in her mind, since we'll be married we'll share this debt together regardless. This would be a way for us to knock out one debt and apply towards a home together. I gave her the unfortunate scenario if something were to happen (such as us splitting) and she said that we'd work out a payment plan (which, I'm not too worried, we're both honest people and I'm 100% certain I pay back any money I would owe).
Is this a solid plan, should I be worried? Is this feasible to do? We're pretty dead set in love and planning to get married in the future, I just don't want to put us in a financial bind. Her Mom seems to think this is a good idea and the payoff would be greater.
Any advice?
Submitted December 02, 2018 at 06:16PM by college_debt_advice https://ift.tt/2DTRnm6
