Tell me about student loans.

[daughtersrus]

My DD will be transferring to a university in the fall after graduating with her AA from a local community college.

She had applied for a tuition waiver but unfortunately, her name was not chosen in the drawing.

I know that we should have been more prepared but now we're trying to figure out how she's going to pay for this. We were told that the Federal Student Loan max for her will be $7,500 for the year. Our FAFSA amount is way more than the total (I have no idea how they come up with this figure)

It's too late for her to be an RA for the fall (the applications needed to be in by Feb) and they generally only choose about 20 in the Spring. Those applications won't be available until August.

Any and all information is welcome.

I posted this on the community page as well.

Thanks!

 

[Princess_Pris85]

My DD will be transferring to a university in the fall after graduating with her AA from a local community college.

She had applied for a tuition waiver but unfortunately, her name was not chosen in the drawing.

I know that we should have been more prepared but now we're trying to figure out how she's going to pay for this. We were told that the Federal Student Loan max for her will be $7,500 for the year. Our FAFSA amount is way more than the total (I have no idea how they come up with this figure)

It's too late for her to be an RA for the fall (the applications needed to be in by Feb) and they generally only choose about 20 in the Spring. Those applications won't be available until August.

Any and all information is welcome.

I posted this on the community page as well.

Thanks!

Daughtersrus - I worked in financial aid for a little while so here's what you may be facing.

Your first step should be contacting the school to see if the school has any institutional financial aid applications your daughter can fill out. Federal loan limits for 3rd year undergrads is $7500 (including subsidized and unsubsidized loans), but she may be able to qualify for other institutional loans.

Depending on your income level, your daughter may also qualify for the Perkins loan and the Pell Grant. The Perkins loan is has a 5% set interest rate and the amount a student can take out at the undergrad level is $5,500 per year. However, the Perkins loan is determined by the school according to their financial aid need analysis. The Pell Grant is a grant of money (not a loan) and is also for financially needy students.

The subsidized and unsubsidized loans (Stafford Loans) have a loan limit of $5500 for the subsidized loan (means that you don't pay interest on the loan while the student is in school) and $2000 for unsubsidized (which means you do pay interest on the loan while in school - not pay immediately, but you accrue interest). Generally you only qualify for unsubsidized loans if you are (1) no longer a dependent of your parents or (2) your parents did not qualify for the Parent PLUS Loan.

The Parent PLUS Loan is a loan you would take out for your daughter. It has a maximum interest rate of 8.5% and you must begin making payments on the loan 60 days after it's been disbursed (i.e. when the school gives your daughter the money or applies it to her student account). The PLUS loan has no limit - but it is in your name so they take into consideration your credit. You would be responsible for paying it, not your daughter.

All in all, contact the school - see if they have any other programs for applying for financial aid, ask them if your daughter qualifies for Perkins or Pell, and consider the Parent PLUS loan if your daughter is still a dependent.

If you have any other questions, let me know!

 

[daughtersrus]

Daughtersrus - I worked in financial aid for a little while so here's what you may be facing.

Your first step should be contacting the school to see if the school has any institutional financial aid applications your daughter can fill out. Federal loan limits for 3rd year undergrads is $7500 (including subsidized and unsubsidized loans), but she may be able to qualify for other institutional loans.

Depending on your income level, your daughter may also qualify for the Perkins loan and the Pell Grant. The Perkins loan is has a 5% set interest rate and the amount a student can take out at the undergrad level is $5,500 per year. However, the Perkins loan is determined by the school according to their financial aid need analysis. The Pell Grant is a grant of money (not a loan) and is also for financially needy students.

The subsidized and unsubsidized loans (Stafford Loans) have a loan limit of $5500 for the subsidized loan (means that you don't pay interest on the loan while the student is in school) and $2000 for unsubsidized (which means you do pay interest on the loan while in school - not pay immediately, but you accrue interest). Generally you only qualify for unsubsidized loans if you are (1) no longer a dependent of your parents or (2) your parents did not qualify for the Parent PLUS Loan.

The Parent PLUS Loan is a loan you would take out for your daughter. It has a maximum interest rate of 8.5% and you must begin making payments on the loan 60 days after it's been disbursed (i.e. when the school gives your daughter the money or applies it to her student account). The PLUS loan has no limit - but it is in your name so they take into consideration your credit. You would be responsible for paying it, not your daughter.

All in all, contact the school - see if they have any other programs for applying for financial aid, ask them if your daughter qualifies for Perkins or Pell, and consider the Parent PLUS loan if your daughter is still a dependent.

If you have any other questions, let me know!

Thank you for the info!

I'm sure that I'll have more questions.

 

[dthogue]

Did you file the FAFSA? That is your first step in securing any type of financial aid including the Stafford Loans, as well as state loans and grants.

The college my DD attends has a payment plan available that will allow you to make 12 monthly payments on the remaining amount you owe after financial aid. There is no interest charged, only a $50.00 enrollment fee. My middle DD will be starting college in the fall and her school offers a similar plan, but has a 10 month re-payment plan.

Also - If you apply for a Parent PLUS loan and are denied, your DD can ask for an additional $4,000 unsubsidized Stafford Loan if you are interested, you just have to ask the financial aid office for it.

Is your daughter planning on living at home or at school. If she is in an apartment she can save lot of money by not getting the meal plan.

Your school might also offer scholarships. Be careful all schools have deadlines that the FAFSA must be filed in order to qualify for aid - some are as early as Feb 1st.

Call the school's financial aid office - I have found that they are a wealth of information and they seem very willing to help.

Good luck!

Tammy

 

[lindsey]

As a previous poster said - a parent PLUS loan is also an option, even though you do have to start paying after they send the 2nd semester money to the school, but at least the interest is low compared to a regular loan. I have two Sallie Mae PLUS loans, I know, I should have planned better also. But I was able to do everything online, which made it easier. I tried to make sure I asked for the lowest amount I could think I needed. If all goes well, DS will graduate in three weeks! It took 5 years, but he's the first in our family with a college degree.

 

[MoniqueU]

Can grandparents apply for the parent plus loan? mine and my dh's credit is in the tank.

 

[Princess_Pris85]

Unfortunately, only parents or legal guardians can sign or the PLUS loan. If you can't sign for the PLUS loan, your child may have the option of the unsubsidized loan or you may be able to cosign on a private student loan.

 

[daughtersrus]

Can grandparents apply for the parent plus loan? mine and my dh's credit is in the tank.

You may still qualify. I have been researching this for the last few days. I've spoken to two people at the "disbursement center" for the federal loans. Both have told me that they do not go by credit scores. They check for adverse information on the credit report. They read the list to me of what they are looking for. It included not having a bankruptcy (but I think that they said that 13 is ok), not being more than 90 days late, not having a foreclosure, not have a repossession, not have a wage garnishment, not have a county or state lien...

If you like, I would be happy to find the phone# again and send a PM to you.

Did you file the FAFSA? That is your first step in securing any type of financial aid including the Stafford Loans, as well as state loans and grants.
The college my DD attends has a payment plan available that will allow you to make 12 monthly payments on the remaining amount you owe after financial aid. There is no interest charged, only a $50.00 enrollment fee. My middle DD will be starting college in the fall and her school offers a similar plan, but has a 10 month re-payment plan.

We did FAFSA a few months ago. Sadly, they're saying that our family contribution is almost 1/2 of our salary.

I'll look into the monthly payment as well but I'm not sure that we would be able to afford it. It looks like it will be over $1,000 a month.