private student loans questions

[SandrA9810]

Since we have recently discovered you can use student loans for just about anything... how does it work??

Kari wants to go back to college to get her BA, she has enough credits for an AA and we have to return to her last community college to get some things straighted out. (she borrowed some books for a final report, and then we moved like a week later, and they got packed up) We still have the books but we owe like 200-300 to the college.

Our problem is, I still haven't been able to find work and would like to. But we're living soley off her income (at like 70hrs a week). So it doesn't leave much time for school. But if we could take out a loan to help reduce our debt (which takes up most of her income, like 90%), it would leave her with more time for school. And to fully pay for her tuition.

How much extra can you get in student loans?? It says you can use it for things like housing and stuff. And she's already has a few dings with her last sallie mae loans that happened about two years ago, but there hasn't been any problems since all her loans were combined into one on a new payment plan.

 

[SandrA9810]

I'm guessing she has to first be accepted to the college. which is going to be a 100 or so out of pocket. But since she was accepted once, I'm sure she won't have a problem with it.

 

[tasha99]

Step 1: Fill out a FAFSA listing the schools you might go to (they'll send info to all of them)

Step 2: Apply to go to college

If accepted, the college will give you a budget. You can appeal some of their decisions. For example, I had my health insurance added to my budget.

The college will send you a financial aid offer based on your Fafsa and what they have to offer. There are lots of different types of loans--Perkins, Stafford (subsidized and unsubsidized). You should probably avoid private student loans if you can.

 

[PatsMom]

I believe private student loans through Sallie Mae are limited to the cost of attendance as reported by the school. Interest starts being owed 6 months after the loan is issued.

Other types of student loans are paid directly to the school so you wouldn't be able to divert them to a purpose not related to education, like paying down other debt.

If you don't have a solid credit history Sallie Mae will require a co-signer. The co-signer can apply to be released 6 months after graduation when the loan goes into mandatory repayment.

 

[Soon2B4]

My DH deferred his student loans for longer than the 6 months as did his sister. I don't know if this is still the policy since it was about 10yrs ago that he did it, but we are STILL paying on them! He borrowed money to live off of as well as go to school. He ran up a huge bill to go to a state school where he lived at home with his parents. Now that the interest rate has repriced to a much lower rate, it is going down a lot faster.

 

[Lisa_M]

Before you consider private loans, do your research and then some! Private student loans are based on your credit rating, so if Kari has bad or questionable credit, she may find that these loans will put you in worse financial shape. Interest rates are variable, generally without caps. When DH's private loans through Sallie Mae were taken out they were about 9-10%, then they went up to 13%, just due to market changes, now they are about 7%. Student loans can NEVER be discharged in a bankruptcy, so keep that in mind. They will be yours forever regardless of circumstance. Usually you can only borrow what the school will cost. If there is an overage due to scholarships or whatever, you can keep it and use it for whatever, but keep in mind you will be paying for that whatever for 10-30 years.

If she has a job and you can pay your bills with it, it seems foolish to quit that to go back to school when there is no other income. You won't be able to borrow enough money to continue to live the same lifestyle. I would suggest waiting until you can find a job and then consider it or try to save up some money. Maybe take a few classes at a time at night so she won't have to quit her job.

 

[tasha99]

Other types of student loans are paid directly to the school so you wouldn't be able to divert them to a purpose not related to education, like paying down other debt.

While they do get paid directly to the school, the school sends you a refund after they take out their fees and tuition. Since a budget is determined by cost of housing, food, travel, books, child care etc in addition to tuition, the refund can be several thousand dollars. The budget isn't overly generous, but if you work and go to school at the same time, you could conceivably come out ahead. Granted, you sign paperwork saying you will apply the money to school only, but if you put $1000 down on something, where did it really come from--the loan or your job? If you only had one, you wouldn't have the extra money.

Don't forget Pell Grants. For a first bachelor's degree, you would most likely get grants as well as loans if you're independent and mid to lower income.

Edited to add: You really have to consider whether you'll get out of school making more money. Borrowing money to be a pharmacist is probably smarter than borrowing it to get a degree in fine arts. I'm in school now and working, and though the loans are a bit scary, there are some loan forgiveness programs I'll qualify for when I get my first slp job (for teaching in a rural area). As I mentioned in my first post, I'd be especially careful of private loans. It might be better to take the best loans and grants, and work part time to make up the difference.

 

[Nie0214]

 

[vettechick99]

I am going back to get my masters right now and applied for FAFSA. I was awarded both subsidized and unsubsized monies to the tune of $24,000 per year. I only needed $6k! I have good credit and a good repayment record, so that may have been a deciding factor in giving me so much. But at least for me, they were more than willing to give me money. That's the trap though.

I have also heard about parents taking out student loans in their own names. My MIL did that for my DH when she conned him into going to school (it worked!).

Just remember that anything you borrow now, you have to pay back. And it takes forever - we are still paying back our BS loans from 10 yrs ago.

 

[travelprincess]

If you apply through FASFA, that is a government program. They do not check your credit its based on need and income.
Depending on the school is how much you can get each semester, you are limited by the type of degree. For an AA degree I believe that is is usually $10000 for the entire term of your schooling. Remember that does not include any grants you will be eligible for, those you do not pay back.
Depending if you get a sub or unsub loan depends on when you pay it back. One you start paying interest back within six months and the other your start paying back the loan six months after leaving school.
FASFA will also go by LAST years income when determining.
Hope this helps.

I worked in a Techniical college for 11 years.

 

[SandrA9810]

I know about FASFA and all. And I definatly know about repayments of student loans. Kari had 3 student loans (2 through sallie mae, 1 through the university of miami)... tough times after she stopped going to community college made us default on some of those loans. Finally UM advisor set up an account through sallie mae that bundled all of them together. The loan is currently in forbearance, but would be eligible for defferment (non interest accuring) once she returns to school.

Her current loan is about 10,000$, on a 10 year repayment plan, with about 6,000$ in interest (6%). I figured out that if I sent an extra 50$ per month it would cut back on the loan by 5 years.

Even with that, the repayment terms are much better than what we're doing with the credit cards that average 20% or more APR.

Now that she's finally over the age of 24 she doesn't have to claim her parents income on the FASFA forms, but they would co-sign if needed on a loan. Her credit score isn't half bad, it's 630ish, but it's not in the "good" rating anymore. (as it seems to slide higher and higher, soon enough an 800 will only be considered good)

Her parents have also told her that they would pay off her college debt once she graduated. They've paid quite a bit since she went to UM for 3 years, and the two years at community college her parents were considered over-qualified, and paid for all her classes out of pocket. (Don't ask why she's spent 5 years and doesn't have an AA yet...)

I'm definatly not expecting them to pay for anything outside of what the tuition was. I definatly don't mind it at all. But if she was to go back to school, it would put everything into defferment, and make it easier on us right now till we can get things together.

She wants to go back to school to get a teaching degree in Math and Theater. And only making 7.50$ an hour isn't making it. And working for Disney prevents us from being able to move outside of orlando. We're both done with Orlando and if she had a teaching degree it would be fun to see where that would take us. Disney was one of her ultimate goals in life, and slowly but surely they have destroyed all the magic for her. Not in the sense of "knowing" how the magic works, but in taking away everything she loved about Disney. Starting from her first year, she was devestated that ended the country bear christmas show before she ever got to work one. She even went off on Val Bunting when they had an area meeting about the announcement. (although she didn't realize who it was because she got to the meeting late).

There will always be a need for teachers, and it comes natural to her. And I want to make sure I do everything possible that she gets to achieve her goals. With the way things are now, I don't want her to leave Disney until she finishes. Because 1 it's cheap insurance for the both of us, and being in a unionized roll there's little chance that she'd get laid off.

 

[SandrA9810]

I know there are a few grants she can qualify for, especially teaching. And she had the florida lotto scholarship when she was attending UM, but because she failed out her last sem. she doesn't qualify for it anymore.
When we moved to Orlando in 2006, she applied for UCF, got accepted, but for the FASFA forms, she had to put in her parents income even though they were not providing us any financial support, which in turned lowered the amount of money she could recieve.
Then Disney came along, and we both devoted all of our time to that, so school got put aside. But now it's something she wants to finish again.

 

[Cindy B]

I would seriously reconsider teaching. I'm a recent teaching graduate (december) with two certs (K-5, and Middle School LA) and the competition here is FIERCE!

I'm talking thousands of people for one/two jobs. And all the applicants are 4.0, great schools, double-triple certs and the jobs are not there.

Many districts are laying off teachers. For example, in my district, they are laying off all untenured teachers and 35 teacher's aides.

So for positions starting in September, I have compete with experienced teachers as well as other recent graduates.

I am looking in a four county radius and there is nothing within 50 miles of my home. I can do charter schools but they pay very low like 30K a year (versus public school pay 45-50K per year first year) and the hours are awful and in very dangerous urban areas.