Article on College Debt- so true it makes me cry

[Michie]

I know some of you have posted that you took out loans yourself to pay for college not your parents. I am so glad that my boys are almost though with college, because this financial aid stuff is confusing.

Now the Stafford loans, those are just for what, they are not very much, maybe $2500 a year? Is that right? That would not cover the entire tution for most colleges And most other loans are based on credit worthiness. That is what confuses me, when people say they have taken out loans to pay for their tution. Unliss their family contribution is real low and the Stafford loans will cover the remainder

 

[Crankyshank]

I wouldn't necessarily say it's a poor choice of living area. Especially around here- there's hardly cheap places to live in New England if you don't work from home or commute 8hrs each way to work.
sure you can pack up and move across the country, but isn't that what's causing the increase in housing costs in places where it was once cheaper to live (FL and NC are 2 examples I can think of and I'm sure there are more). Even locally what were once reasonable cost areas that were still within commuting distances to metro areas are no longer affordable because of the rush of people moving away from Boston.

 

[LuluLovesDisney]

I know some of you have posted that you took out loans yourself to pay for college not your parents. I am so glad that my boys are almost though with college, because this financial aid stuff is confusing.

Now the Stafford loans, those are just for what, they are not very much, maybe $2500 a year? Is that right? That would not cover the entire tution for most colleges And most other loans are based on credit worthiness. That is what confuses me, when people say they have taken out loans to pay for their tution. Unliss their family contribution is real low and the Stafford loans will cover the remainder

There are private loans and federal loans.

Stafford loans are based on the family's estimated financial contribution, but that's only an estimate because in some cases, due to other circumstances families can't or won't pay that much.

I know in my BF's case, his parents didn't pay for anything at all- not even bus fare or a blanket. BF had Stafford loans (BF paid those off now, though ) as well as Sallie Mae and another company (the name escapes me) It took a couple loans patched together (as well as work study program and another job) to meet the tuition, room and board.

College loans are a fact of life, but when there are people whose parents ARE NOT contributing to their education, I think that should be taken into consideration. A student who has 40k loan whose parents send him money for books, clothes, etc. is in much better shape than a student who has to pay for every pencil himself.

 

[Michie]

There are private loans and federal loans.

Stafford loans are based on the family's estimated financial contribution, but that's only an estimate because in some cases, due to other circumstances families can't or won't pay that much.

I know in my BF's case, his parents didn't pay for anything at all- not even bus fare or a blanket. BF had Stafford loans (BF paid those off now, though ) as well as Sallie Mae and another company (the name escapes me) It took a couple loans patched together (as well as work study program and another job) to meet the tuition, room and board.

College loans are a fact of life, but when there are people whose parents ARE NOT contributing to their education, I think that should be taken into consideration. A student who has 40k loan whose parents send him money for books, clothes, etc. is in much better shape than a student who has to pay for every pencil himself.

But the private loans are based on credit worthiness, right? I dont see how a 18, 19, 20 year old can qualify for one of those?

And arent students...considered dependents until they are 25 or they get married or have a child? And I thought they was more to just saying that my parents won't help with expenses, I thought you had to have documentation?

Ack! I am getting myself even more confused!!!!

 

[disneysteve]

And arent students...considered dependents until they are 25 or they get married or have a child?

You are only a dependent if there is someone who provides more than 50% of your support and claims you on their taxes. Otherwise, you are on your own. It doesn't matter how old you are. If a 19 year old gets zero parental support, he/she is no longer a dependent.

As for credit worthiness, I graduated with $102,000 in loans. I guess the lenders felt I was a worthwhile risk.

 

[MyGoofy26]

But the private loans are based on credit worthiness, right? I dont see how a 18, 19, 20 year old can qualify for one of those?

And arent students...considered dependents until they are 25 or they get married or have a child? And I thought they was more to just saying that my parents won't help with expenses, I thought you had to have documentation?

Ack! I am getting myself even more confused!!!!

Private loans, yes they're based on credit. But federal student aid (Direct Loans) are not. All you have to be is a student in good standing to get a loan from Direct Loans.

As far as dependents - if a student files their taxes and is NOT claimed on someone else's taxes, they can be considered independent. Of course a parent that won't help and won't stop claiming a dependent they're not supporting will make things more difficult and that's probably a whole other issue, LOL.

 

[Michie]

I meant dependent as far as FAFSA wise. I am sooo glad that my boys scholarship covers most of their expenses and we are able to just pay the rest out of our pocket other wise I think I would just from confusing myself!!

 

[MyGoofy26]

I meant dependent as far as FAFSA wise. I am sooo glad that my boys scholarship covers most of their expenses and we are able to just pay the rest out of our pocket other wise I think I would just from confusing myself!!

FAFSA is pretty much just your tax information. So if a parent claimed a student, the student would have to include the parents' tax info. If no one claimed you, you'd leave that section blank. Once I started filing independent, my school would send a short form for me to fill out and send a copy of my tax return to verify that I didn't file as a dependent and that was it.

 

[Lisa loves Pooh]

I wouldn't necessarily say it's a poor choice of living area. Especially around here- there's hardly cheap places to live in New England if you don't work from home or commute 8hrs each way to work.
.

Exactly--that is why it is a poor choice.

Two of the graduates chose to move to those areas when they had a whole country to choose from.

While the poly scie graduate from Iowa may not have gotten the job of her dreams, there are 50 states with 50 state capitals and practically an infinite number of local governments where she could have gotten her start.

The Columbia Graduate moved to Boston, was it---out of all 50 states where he could have had an infinite # of newspapers our magazines...he picks a pay through your nose city with his student loans to consider.

So yes--they did choose poorly.

 

[Lisa loves Pooh]

But the private loans are based on credit worthiness, right? I dont see how a 18, 19, 20 year old can qualify for one of those?

And arent students...considered dependents until they are 25 or they get married or have a child? And I thought they was more to just saying that my parents won't help with expenses, I thought you had to have documentation?

Ack! I am getting myself even more confused!!!!

I think more than age is considered. When I filled out the FAFSA--I did have to have my mothers tax information as her income was used as a consideration of what I qualified for...though the burden was all mine.

 

[Lisa loves Pooh]

You are only a dependent if there is someone who provides more than 50% of your support and claims you on their taxes. Otherwise, you are on your own. It doesn't matter how old you are. If a 19 year old gets zero parental support, he/she is no longer a dependent.

As for credit worthiness, I graduated with $102,000 in loans. I guess the lenders felt I was a worthwhile risk.

It is stickier than that. Up until age 24 (I think)--you are a dependent unless you can prove otherwise.

I got zero parental support--but I was claimed.

I remember in school that there was a process to declare indepedence...but alas...I wasn't able to try that.

 

[Lisa loves Pooh]

I meant dependent as far as FAFSA wise. I am sooo glad that my boys scholarship covers most of their expenses and we are able to just pay the rest out of our pocket other wise I think I would just from confusing myself!!

When I was in school..to be even considered for Academic based scholarships from the school (i.e. non-need based)..you still had to go through the FAFSA process.

I thought it was kind of silly--but UF still makes you go through all that Financial Aid garbage even if you didn't need it but just wanted to be considered for something based on talent or smarts.

 

[disneysteve]

It is stickier than that. Up until age 24 (I think)--you are a dependent unless you can prove otherwise.

When you file for financial aid, don't you have to provide a copy of your parents' tax return? If they don't claim you as a dependent, wouldn't that be proof?

Obviously, that doesn't help if your parents claim you fraudulently when they aren't really providing for your support. I had some friends in that situation in college and it was a royal pain in the butt for them.

 

[Michie]

I think more than age is considered. When I filled out the FAFSA--I did have to have my mothers tax information as her income was used as a consideration of what I qualified for...though the burden was all mine.

That is where I am confused! Say, your family contribution is 18,000, but your parents will not help, how does somebody qualify for aid?

 

[Michie]

This is from the FAFSA website:


Although you're not applying for federal student aid in the 2005-2006 academic year, let's assume you are. You would be considered an independendent student ONLY IF at least one of the following criteria applied to you:

You were born before January 1, 1982.

You are or will be enrolled in a master's or doctorate program (beyond a bachelor's degree) at the beginning of the 2005-2006 school year.

You're married as of the day you apply (or, you're separated but not divorced).

You have children who receive more than half their support from you.

You have dependents (other than your children or spouse) who live with you and who receive more than half their support from you, at the time you apply and through June 30, 2006.

Both your parents are deceased, or you are (or were until age 18) a ward or dependent of the court.

You're a veteran of the U.S. Armed Forces. (A "veteran" includes students who attended a U.S. service academy and who were released under a condition other than dishonorable. For more detail on who is considered a veteran, see the explanatory notes on the FAFSA.)

If none of these criteria applied to you for 2005-2006, you would be considered dependent




Now our family contribution is high so if I just did not want to help my boys out, they would be in dire straights.

 

[disneysteve]

This is from the FAFSA website:


Although you're not applying for federal student aid in the 2005-2006 academic year, let's assume you are. You would be considered an independendent student ONLY IF at least one of the following criteria applied to you:

You were born before January 1, 1982.

You are or will be enrolled in a master's or doctorate program (beyond a bachelor's degree) at the beginning of the 2005-2006 school year.

You're married as of the day you apply (or, you're separated but not divorced).

You have children who receive more than half their support from you.

You have dependents (other than your children or spouse) who live with you and who receive more than half their support from you, at the time you apply and through June 30, 2006.

Both your parents are deceased, or you are (or were until age 18) a ward or dependent of the court.

You're a veteran of the U.S. Armed Forces. (A "veteran" includes students who attended a U.S. service academy and who were released under a condition other than dishonorable. For more detail on who is considered a veteran, see the explanatory notes on the FAFSA.)

If none of these criteria applied to you for 2005-2006, you would be considered dependent

Interesting. So even if your parents don't claim you as a dependent, FAFSA still consider you a dependent. That makes no sense.

 

[LuluLovesDisney]

That is where I am confused! Say, your family contribution is 18,000, but your parents will not help, how does somebody qualify for aid?

Michie, this is exactly what I was talking about w my BF. The only federal loans took into account the imaginary amount his parents would contribute.

What you do is apply for a private loan. He did have to have a parent sign the forms, since he wasn't independent as of his first year of college, so that if he didn't pay them, the companies would go after his parents, but since he's paying, his parents did nothing more than sign. For his first year of college, even though his mother didn't pay anything, his father was still required to send child support payments, so that helped a little, but the rest of the years, he was on his own. I wonder, though, if his father wouldn't sign the papers, would he have not been able to go to college at all?



This is the type of student who does end up in a dire situation.

 

[LuluLovesDisney]

Interesting. So even if your parents don't claim you as a dependent, FAFSA still consider you a dependent. That makes no sense.

The more I learn about FAFSA, the more "interesting" things I see, Steve.

 

[Michie]

Interesting. So even if your parents don't claim you as a dependent, FAFSA still consider you a dependent. That makes no sense.

I can die a happy woman now!!! Finally somebody understands my point!!!

So does that mean people are unknowingly commiting fraud?

 

[Michie]

Michie, this is exactly what I was talking about w my BF. The only federal loans took into account the imaginary amount his parents would contribute.

What you do is apply for a private loan. He did have to have a parent sign the forms, since he wasn't independent as of his first year of college, so that if he didn't pay them, the companies would go after his parents, but since he's paying, his parents did nothing more than sign. For his first year of college, even though his mother didn't pay anything, his father was still required to send child support payments, so that helped a little, but the rest of the years, he was on his own. I wonder, though, if his father wouldn't sign the papers, would he have not been able to go to college at all?



This is the type of student who does end up in a dire situation.

So his parents co-signed? That is a big deal! There are students who parents will not, are not credit worthy to sign.

I am overyjoyed that somebody else thinks the FAFSA does not make sense! and a doctor nonetheless!!!

ok, I will stop.