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Option 2: Student to Take Some Responsibility

Use the BLOC to Pay a Portion of Education Costs

Parents will use the BLOC for college costs, but expect the student to share in paying college expenses.

Steps:

  1. student and parent estimates
    how much money will be needed for the academic year. Use this budgeting worksheet to budget available aid and costs:

    download college budgeting worksheet



  2. student applies for a Private Student Loan,
    you can borrow up to $30,000 per academic year (up to $40,000 for certain schools where the cost of attendance has been determined to exceed $30,000).

    The parent will need to co-sign for the loan since the student will not have the credit criteria to qualify

    more information about private student loans



  3. upon application,
    request the option for immediate repayment of loan and interest (available for undergraduate students only):

    see loan repayment terms

    as the parent, you will use your BLOC to make the principal and interest payments while the student is attending college

    note: if a graduate student where payments are automatically deferred, you can set aside monthly amounts in your BLOC as a loan prepayment gift upon graduation: see graduate loan repayment terms



  4. student and parent use pre-paid credit cards
    to manage monthly spend. Pre-paid's set limits on the amount spent each month. You can use the BLOC to load up monthly amounts based on the college budget:

    view how pre-paid cards can work



  5. parent accesses their BLOC
    to pay educational expenses. Parent uses money management techniques to pay down the borrowed amount

    jump to slide show to view how program works



  6. never let your BLOC drop below $0 balance
    use the BLOC to payoff other debts, including your mortgage

    In the example below, the parent will be making monthly payments that will be less than the discretionary income in the BLOC. The parent decides to use their BLOC to payoff their mortgage

    view how the BLOC can be used to pay down your mortgage
Parent Makes Payments on the Loan

The parent will use the BLOC to make monthly payments on the private student loan. You will continue to make payments while the student is attending school.

The student may need to borrow more money for each academic year. You can repeat the process by co-signing the private student loan application with the option of immediate principal and interest loan payments.

You will then use the BLOC to make the loan payments on each loan borrowed.

Get a Co-Signer Release

Upon graduation and acceptance of a career salary, the student takes over the payments for the remaining term of the loan.

Parent can then ask for a co-signer release if certain parameters are met. Student has total responsibility of loan repayments.

see information about co-signer release


    program benefits:
  • your BLOC functions like a bank when you need funds
  • use to pay down the private student loan
  • student shares some responsibility for the loan



    your BLOC account may look like this if you had the following spending plan:

    • net monthly income: $5,000
    • living expenses: $4,000
    • discretionary income: $1,000
    • monthly loan payment on the private student loan: (example) $171.00

    note: this is an example of a payment plan used for this illustration. Individual financial circumstances may be different

BLOC Account
Starting Credit Line Balance: $60,000

Date

From

To

Advance from BLOC

Payment to BLOC

Balance Owned
Aug Beginning Balance Year 1   $0
Aug BLOC

Loan Payment

$171   $171
Aug BLOC Living Expenses $4000   $4,171
Aug BLOC Make Additional Mortgage Payment $5,000   $9,171
Aug Pay Paychecks   $5000 $4,171
Total BLOC   $9,171 $5,000 $4,171
Sep Beginning Balance     $4,171
Sep BLOC Loan Payment $171   $4,342
Sep BLOC College Payment to Student $200   $4,542
Sep BLOC Living Expenses $4,000   $8,542
Sep BLOC Paychecks   $5,000 $3,542
Total BLOC   $4,371 $5,000 $3,542
Oct Beginning Balance     $3,542
Oct BLOC Loan Payment $171   $3,713
Oct BLOC Misc. College $100   $3,813
Oct BLOC Living Expenses $4,000   $7,813
Oct BLOC Paychecks   $5,000 $2,813
Total BLOC   $4,271 $5,000 $2,813
Nov Beginning Balance     $2,813
Nov BLOC Loan Payment $171   $2,984
Nov BLOC Living Expenses $4,000   $6,984
Nov BLOC Paychecks   $5,000 $1,984
Total BLOC   $4,171 $5,000 $1,984
Dec Beginning Balance     $1,984
Dec BLOC Loan Payment $171   $2,155
Dec BLOC Travel Home $350   $2,505
Dec BLOC Living Expenses $4,000   $6,505
Dec BLOC Paychecks   $5,000 $1,505
Total BLOC   $4,171 $5,000 $1,505
Jan Beginning Balance     $1,505
Jan BLOC Loan Payment $171   $1,676
Jan BLOC Living Expenses $4,000   $5,676
Jan BLOC Paychecks   $5,000 $676
Total BLOC   $4,171 $5,000 $676
Feb Beginning Balance     $676
Feb BLOC

Loan Payment

$171   $847
Feb BLOC Living Expenses $4000   $4,847
Feb BLOC Make Additional Mortgage Payment $5,000   $9,847
Feb Pay Paychecks   $5000 $4,847
Total BLOC   $9,171 $5,000 $4,847
Mar Total Activity w/ Payment $4171 $5000 $4,018
Apr Total Activity $4171 $5000 $3,189
May Total Activity $4171 $5000 $2,360
Jun Total Activity $4171 $5000 $1,531
Jul Total Activity $4171 $5000 $702
Total BLOC   $20,855 $25,000 $702
Aug Beginning Balance Year 2   $702
Aug BLOC

Loan Payment -1

$171   $873
Aug BLOC

Loan Payment -2

$139   $1,012
Aug BLOC Living Expenses $4000   $5,012
Feb BLOC Make Additional Mortgage Payment $5,000   $10,012
Aug Pay Paychecks   $5000 $5,012
Total BLOC   $9,310 $5,000 $5,012
What Does This Show

  For Year 1  
  Opening Credit Line Balance $0
  Paid Student Loan Payments - $2,052
  Spending Money for Student -$300
  Paid Travel Home -$350
  Paid Down Mortgage -$10,000
  Pay Living Expenses - $48,000
  Balance Owned - $60,702
  Deposit Income Payments + $60,000
  Ending Balance Owned - $702
  • parent used BLOC to pay the monthly payments on the private student loan that was borrowed to pay for college expenses minus financial aid received
  • spending money was sent to the student
  • travel money for the holiday was sent to the student
  • living expenses include mortgage payment, food, family care and other living expenses
  • you made 2 additional mortgage payments to reduce your mortgage loan balance

  • your starting balance was $0
  • you borrowed $60,702 from the BLOC
  • you made payments of $60,000 into the BLOC
  • your ending balance was $702

  • you never made a schedule payment to the BLOC:
    your income represented your monthly payment
  • you will only pay interest on the average daily balance


    Starting in Year 2
  • student get a 2nd private student loan to pay for college expenses minus financial aid received
  • parent uses BLOC to pay the loan payments on both loans
Where to Next
  • View Option 1:
    view the 1st option to determine if this plan meets your financing objectives: go to college funding option 1

  • Next Step:
    use this 10-step success plan for implementing and managing your BLOC: view 10-step success plan

  • Last Step:
    see how the BLOC can be used to payoff your mortgage loan FAST: view mortgage payoff plan


    Important Note:
    Never Let Your BLOC Move Into Negative Territory

    Your BLOC should not drop below a zero balance. This is money that you are giving away to the banks. You should use your BLOC to payoff your mortgage whenever your BLOC balance reaches zero

Home Equity Application

BANK EQUITY for College Aid