Researching student loans, wow my head is spinning. Any info?

[LuvOrlando]

so I bought a bunch of books and read them all by Christmas but now with summer course and fall course deadlines looming my head is swimming in info and I'm very confused. A friend told me Sallie Mae was wonderful, her son went to a reasonably priced school and for each semester they paid 1/2 cash and the other half over the rest of the year. It seems these can be in the students name, which we would pay but it would give some much needed buffer room. The only one mentioned by the Penn State financial aid person was Parent Plus but these have a higher interest rate and a origination fee, no personal reviews from anyone so I don't know what to think. usaa seems to have some too and then there is home equity but that feels like a bad step

I went to a small school so I didn't have any loans and no experience at all other than what I see in the news. Gadzooks, I am feeling overwhelmed and under informed so any input would make me very grateful - no idea what I am doing SOS

 

[Rhie]

I am in college and just had to do all this myself. It can be overwhelming at first. I have a few suggestions and questions that may help you:

1) Does the school have a financial aid office? First thing is to go talk to them. This is literally their job. They get paid to help you navigate the loans and grants. So, make sure you stop in there. I'd do that in the morning, just because you might have to wait or you may have to run over to another office.

2) Fill out the FAFSA. That is how the government knows how much to award you in loans and grants. Every student HAS TO fill out this form every year to even be considered for aid. It can be found at www.fafsa.ed.gov. This information is sent to your school and to the government.

3) Go to StudentLoans.gov. This is where the government explains to you what sort of loans are available for your income bracket, what the fine print means, and how to apply. This information is sent to your school's financial aid office and the government. Sallie Mae is a loan servicer. That is, they give the school the money for loans, who then in turn applies the amount to your balance and cuts you a check for any overage. I think you can contact them directly, but there is really no need to do so. Letting someone else do it is much easier! By the way, this money covers books and supplies as well as tuition.

4) If you have good credit, and the above isn't enough to cover your school or you need living expenses covered, contact your local bank for a personal student loan.

I hope this helps! Good luck.

Rhie

 

[steviethegreat]

I have Sallie Mae and so does my sister. The service is relentless about calling. Even when I told them that I was looking for a job and I didn't have the money to pay them, even when my mother was in the hospital, they hounded us for money. Everyone that I've spoken with that has or has had Sallie Mae wishes they had gone a different route. They called my grandparents to have them call us to berate us into giving them money we did not have.

Definitely look into FAFSA. Any financial aid you can get is better than Sallie Mae. :/

 

[teller80]

I have Sallie Mae and so does my sister. The service is relentless about calling. Even when I told them that I was looking for a job and I didn't have the money to pay them, even when my mother was in the hospital, they hounded us for money. Everyone that I've spoken with that has or has had Sallie Mae wishes they had gone a different route. They called my grandparents to have them call us to berate us into giving them money we did not have.

Definitely look into FAFSA. Any financial aid you can get is better than Sallie Mae. :/

Do you think if you owed a different lender money they wouldn't keep contacting you about your past due amount?

 

[LuvOrlando]

I am in college and just had to do all this myself. It can be overwhelming at first. I have a few suggestions and questions that may help you:

1) Does the school have a financial aid office? First thing is to go talk to them. This is literally their job. They get paid to help you navigate the loans and grants. So, make sure you stop in there. I'd do that in the morning, just because you might have to wait or you may have to run over to another office.

2) Fill out the FAFSA. That is how the government knows how much to award you in loans and grants. Every student HAS TO fill out this form every year to even be considered for aid. It can be found at www.fafsa.ed.gov. This information is sent to your school and to the government.

3) Go to StudentLoans.gov. This is where the government explains to you what sort of loans are available for your income bracket, what the fine print means, and how to apply. This information is sent to your school's financial aid office and the government. Sallie Mae is a loan servicer. That is, they give the school the money for loans, who then in turn applies the amount to your balance and cuts you a check for any overage. I think you can contact them directly, but there is really no need to do so. Letting someone else do it is much easier! By the way, this money covers books and supplies as well as tuition.

4) If you have good credit, and the above isn't enough to cover your school or you need living expenses covered, contact your local bank for a personal student loan.

I hope this helps! Good luck.

Rhie

Thanks I did do the FAFSA and did talk to the financial aid person last week for our son and his friend, his friend is getting help and only needs to come up with a third of the cost of the school. I also went with my son's other friend to the local community college and he will pay nothing due to family circumstances. For us, financial aid office wasn't particularly helpful because we are completely on our own & she can't recommend one loan over another and with so many choices out there I thought I would ask about individual preferences and reasons.

 

[LuvOrlando]

I have Sallie Mae and so does my sister. The service is relentless about calling. Even when I told them that I was looking for a job and I didn't have the money to pay them, even when my mother was in the hospital, they hounded us for money. Everyone that I've spoken with that has or has had Sallie Mae wishes they had gone a different route. They called my grandparents to have them call us to berate us into giving them money we did not have.

Definitely look into FAFSA. Any financial aid you can get is better than Sallie Mae. :/

I totally understand your frustration with the process and this is what concerns me. I don't want to spend 5 years, one kid this year and another next year, operating under one set of assumptions only to discover I made a mistake down the road when crazy payment schedules come due. My husband and I hope to be able to absorb all of the costs but life changes so I need to do my best to make sure that we can roll with it if things change. If for some reason we end up not being able to pay and my kids end up with some or most of this bill I do not want to burden them the way I hear some people are burdened, it sounds awful.

 

[LuvOrlando]

With loans so common I figured there must be a lot of people on here that have their own experiences if they wouldn't mind sharing them. Maybe there's stuff that didn't happen to you but a cousin or friend and neighbor those sort of anecdotes might be helpful. Seriously I'm not looking to judge anyone and I hope that doesn't happen. There seems to be an immeasurable amount of options out there yet so little information; I'm starting to wonder if that might be on purpose. I totally do not feel like I making anything remotely close to an informed decision right now

From what I can gather from people around me even if you can't pay the full principle the paying of the of interest as a student moves through school is very important for sustainability.

The lack of origination fees for Sallie Mae does stand out as a good thing, is this the only kind of loan that does that? Is the lack of origination fees some sort of a hook? The government site seems to promote the parent +ones but they have a higher interest-rate and origination fees. We have student orientation coming up and the first week of June and I really want to be prepared so I'm reading what I can find but it all seems/feels either useless or like an infomercial.

 

[LuvOrlando]

Disturbing :/

http://www.wsj.com/articles/thousan...oans-saying-schools-defrauded-them-1453285800

 

[steviethegreat]

Do you think if you owed a different lender money they wouldn't keep contacting you about your past due amount?

That's not what I'm saying at all. What I'm saying is that I didn't know anything about student loans. These were things my parents signed me up for because we didn't have any money for me to go to college. I have gigantic loans that I didn't want/didn't sign myself up for. And I knew nothing about how they worked until I had been out of college long enough and desperate for a job (any job that paid more than 7 an hour) to pay for loans. And Sallie Mae switches account managers every month. So even if you get comfortable talking to someone, the very next day it could be someone else. There was never any consistency. And the worst part was that when we spoke to them, my mom and I, and told them that we both did not have enough money to pay back, per month, the amount they wanted, they told us just not to call them until the bill ALMOST went into default and THEN only then could they help us with a better repayment plan.

When I spoke with the other places I have my loans, all three of them were willing to assist immediately. No mind games. It's not a matter of not wanting to pay back the money, it's a matter of how much I can pay at that time. And Sallie Mae is ruthless, in my experience and my sister's. It will be the first loan I pay in full so I never have to deal with them again. :/

Whatever you end up doing, make sure that your kids know completely (even if you don't THINK they'll have any loan debt associated) what you're doing loan wise. Because it's so much better to know what's happening with loans than to be surprised after with the debt.

 

[amcnj]

• When I was looking at this subject some years back, unless you qualified for subsidized student loans, the interest rates for the unsubsidized was really high. I believe they finally did lower them in recognition of the overall lower interest rate environment we have been in for some time now. Anyway, a home equity line of credit was much less at that time so I went that route. And the interest was tax deductible on top of it. I did take small loans in my children's names from the federal loan program (Nelnet is our loan servicer) so that they would have some credit history. So far Nelnet has been good, with one loan paid, and one about to go into the loan payback phase. We did not select them, they were assigned to handle our loans. Maybe it is a regional or school based assignment though, as they handled both of the loans.

 

[Mrs. Ciz]

so I bought a bunch of books and read them all by Christmas but now with summer course and fall course deadlines looming my head is swimming in info and I'm very confused. A friend told me Sallie Mae was wonderful, her son went to a reasonably priced school and for each semester they paid 1/2 cash and the other half over the rest of the year. It seems these can be in the students name, which we would pay but it would give some much needed buffer room. The only one mentioned by the Penn State financial aid person was Parent Plus but these have a higher interest rate and a origination fee, no personal reviews from anyone so I don't know what to think. usaa seems to have some too and then there is home equity but that feels like a bad step

I went to a small school so I didn't have any loans and no experience at all other than what I see in the news. Gadzooks, I am feeling overwhelmed and under informed so any input would make me very grateful - no idea what I am doing SOS

We do the same thing, but at DS's school you don't need a loan to participate in this program. The school has it's own payment plan. You can divide what you owe into 5 monthly payments per semester (or 4 payments with 10% down or 3 payments with 20% down). There is a $30 fee per semester to set it up, but no interest is charged. We did the prepaid 529 plan when our kids were little, so tuition and fees gets paid automatically through that program. We don't even get billed for it. We pay for room and board on the 5 month payment plan.

When we did the FAFSA, DS only qualified for the $5500 unsubsidized loan. We skipped it last year and this year. When DD starts college in 2017, we may need to do the minimum loans for each kid while they overlap in college. We are trying to save our tax returns for the next couple of years to avoid the loans if we can.

 

[supersnoop]

That's not what I'm saying at all. What I'm saying is that I didn't know anything about student loans. These were things my parents signed me up for because we didn't have any money for me to go to college. I have gigantic loans that I didn't want/didn't sign myself up for. And I knew nothing about how they worked until I had been out of college long enough and desperate for a job (any job that paid more than 7 an hour) to pay for loans. And Sallie Mae switches account managers every month. So even if you get comfortable talking to someone, the very next day it could be someone else. There was never any consistency. And the worst part was that when we spoke to them, my mom and I, and told them that we both did not have enough money to pay back, per month, the amount they wanted, they told us just not to call them until the bill ALMOST went into default and THEN only then could they help us with a better repayment plan.

When I spoke with the other places I have my loans, all three of them were willing to assist immediately. No mind games. It's not a matter of not wanting to pay back the money, it's a matter of how much I can pay at that time. And Sallie Mae is ruthless, in my experience and my sister's. It will be the first loan I pay in full so I never have to deal with them again. :/

Whatever you end up doing, make sure that your kids know completely (even if you don't THINK they'll have any loan debt associated) what you're doing loan wise. Because it's so much better to know what's happening with loans than to be surprised after with the debt.

You need to look into IBR.

And when you say you didn't have money for college, and you didn't want the loans, what were you really expecting at the time? Why did you choose to go to college?

 

[Princess_Meghan <3]

I have a Stafford Loan and I'm repaying through Great Lakes- they've been great to work with! I'm on an income driven repayment plan, which is reevaluated yearly.

 

[piccolopat]

That's not what I'm saying at all. What I'm saying is that I didn't know anything about student loans. These were things my parents signed me up for because we didn't have any money for me to go to college. I have gigantic loans that I didn't want/didn't sign myself up for.

I'm sorry to hear about your situation but the reality is that this started with you and your parents. They should never have signed up for loans that they knew they couldn't repay. I'm not really sure how you didn't sign up for anything that you are on the hook for because that was a part of the FAFSA process when my DD went to college a few years ago. Did you not know how much your school was costing each year? Were there lower cost options that you didn't look into? Did you not know these loans would have to be paid off starting shortly after you graduated?

You might benefit from some courses in personal finance so you can learn of ways to help get you out of this financial mess and avoid problems like this in the future. This can start as self study by borrowing books at your local library.

 

[RitaE]

Ok. I think the first thing you need to do is gain an understanding of the different types of loans which might be available.

1. Government Program Loans. These are the most typical and come with restrictions in regards to interest rates and how much can be borrowed. There are amounts which can be taken out by the Student and amounts which can be taken out by the Parents and these limits of who can borrow how much at what interest rates are mandated by the government. Generally, in order to obtain access to these loans, you must complete the FAFSA. The Financial Aid department at the school can then assist in applying for the loans. Often then a Servicer (Nelnet, Sallie Mae etc) will be the contact point for repayment.

2. Private Market Loans. Although these are often called "Student Loans" they are different from the category above. These are offered by Financial Institutions to pay for education, but they are in effect not all that different than just you going down to your local bank and borrowing money for anything else. Interest rates, repayment terms etc will vary widely.

The one thing I will tell you is to please, please, please understand that anything you personally sign or co-sign for in terms of borrowing money (Such as with a PLUS Loan) - you, personally are obligated to pay if your child doesn't pay the loan for whatever reason. You child not having a job, your child becoming ill or passing away, anything ... you are obligated. It is just as if you co-signed a mortgage or a car loan with your kid. If the first borrower misses a payment, they will be immediately coming to you for the money and you are legally obligated to pay the money.

 

[RitaE]

Whatever you end up doing, make sure that your kids know completely (even if you don't THINK they'll have any loan debt associated) what you're doing loan wise. Because it's so much better to know what's happening with loans than to be surprised after with the debt.

Well, can't argue with that. Unfortunately, I didn't understand that Student Loan paper I signed is way too many students first Financial Education lesson. And with an increasing number of students exiting college with Student Loan balances equal to many mortgage balances, it is a very harsh wake-up call to adult life.

 

[piccolopat]

Well, can't argue with that. Unfortunately, I didn't understand that Student Loan paper I signed is way too many students first Financial Education lesson. And with an increasing number of students exiting college with Student Loan balances equal to many mortgage balances, it is a very harsh wake-up call to adult life.

We made sure our DD was fully aware of what here obligations would be to pay off her loans. Perhaps the colleges can do a better job by explaining this at orientation and certainly parents (who should know better) are failing their kids if they haven't had these financial discussions before they unload the car on move-in day. We also have to stop pushing the idea that high priced college (or any college) is a must have for these young adults. There is nothing wrong with someone going to work for a year or two to save money for college so that they don't have to have these enormous loans. There is nothing wrong with going to a local college so you don't have to pay for room and board (sometimes more than tuition). We need to do a better job of teaching kids (while they are in high school) how to do a cost benefit analysis so they know if the benefit is, in the end, worth the huge investment. Afterall, a $10,000 used car will get you to the same place as a $80,000 luxury car.

 

[LuvOrlando]

That's not what I'm saying at all. What I'm saying is that I didn't know anything about student loans. These were things my parents signed me up for because we didn't have any money for me to go to college. I have gigantic loans that I didn't want/didn't sign myself up for. And I knew nothing about how they worked until I had been out of college long enough and desperate for a job (any job that paid more than 7 an hour) to pay for loans. And Sallie Mae switches account managers every month. So even if you get comfortable talking to someone, the very next day it could be someone else. There was never any consistency. And the worst part was that when we spoke to them, my mom and I, and told them that we both did not have enough money to pay back, per month, the amount they wanted, they told us just not to call them until the bill ALMOST went into default and THEN only then could they help us with a better repayment plan.

When I spoke with the other places I have my loans, all three of them were willing to assist immediately. No mind games. It's not a matter of not wanting to pay back the money, it's a matter of how much I can pay at that time. And Sallie Mae is ruthless, in my experience and my sister's. It will be the first loan I pay in full so I never have to deal with them again. :/

Whatever you end up doing, make sure that your kids know completely (even if you don't THINK they'll have any loan debt associated) what you're doing loan wise. Because it's so much better to know what's happening with loans than to be surprised after with the debt.

I kind of understand how this could have been because they label a whole package as 'financial aid' which implies grants and stuff you don't have to pay back. I was with my son's two friends because neither set of parents have ever owned homes and they don't have any kind of credit history/loans/credit cards to speak of so they are completely bewildered. The parents don't know what they're doing and the kids are following the parents lead because they know even less and I'm listening to the finance people giving half hearted explanations, I can't figure out if it's the financial aid office employees having poor training or what's going on but I have not seen a whole lot of useful information. What I DO see is a kind of blind direction pointing just to get kids in the doors because that's their job. When I ask questions I feel a vibe like I'm coming off as overly demanding because they don't seem to have answers and it's frustrating for me and frustrating for the kid and frustrating for the person on the other side of the desk.

I'm having a hard time and I know what I'm looking for but everything is front loaded sales pitches information bites so far and nobody is really talking about the nuts and bolts about how these different financial instruments operate. Before I do anything I am going to force myself to play a couple things out to the endgame to see what the payment schedules are going to be & such but it's very time-consuming and I don't want to waste effort. Seems the more I dig the muddier things get.

 

[LuvOrlando]

• When I was looking at this subject some years back, unless you qualified for subsidized student loans, the interest rates for the unsubsidized was really high. I believe they finally did lower them in recognition of the overall lower interest rate environment we have been in for some time now. Anyway, a home equity line of credit was much less at that time so I went that route. And the interest was tax deductible on top of it. I did take small loans in my children's names from the federal loan program (Nelnet is our loan servicer) so that they would have some credit history. So far Nelnet has been good, with one loan paid, and one about to go into the loan payback phase. We did not select them, they were assigned to handle our loans. Maybe it is a regional or school based assignment though, as they handled both of the loans.

This is what I'm looking for thanks. We don't qualify for anything subsidized only unsubsidized Stafford and the rest is up to us. I did consider home equity but we're getting older, I'm not sure I want to stay here & I really do not want to absorb exposure to further property depreciation so I am looking to avoid this method.

What would be ideal would be for my kids to be able to take out loans in their names that we would pay as long as we are able to do so. Trouble is I'm frankly not seeing anything where people want to loan to my kids they all would rather have a piece of me and my husband

 

[LuvOrlando]

We do the same thing, but at DS's school you don't need a loan to participate in this program. The school has it's own payment plan. You can divide what you owe into 5 monthly payments per semester (or 4 payments with 10% down or 3 payments with 20% down). There is a $30 fee per semester to set it up, but no interest is charged. We did the prepaid 529 plan when our kids were little, so tuition and fees gets paid automatically through that program. We don't even get billed for it. We pay for room and board on the 5 month payment plan.

When we did the FAFSA, DS only qualified for the $5500 unsubsidized loan. We skipped it last year and this year. When DD starts college in 2017, we may need to do the minimum loans for each kid while they overlap in college. We are trying to save our tax returns for the next couple of years to avoid the loans if we can.

I heard about this program and Penn State has one but here's the thing that concerns me. My daughter starts next year so we will have two in school, what happens if, God forbid my husband loses his job and then we have to take out of the 401(k) or the 529 to support us while we get out of our house & other entanglements. If I don't have a home-equity loan the equity in the home could be a useful resource in the event of a catastrophic situation so that's where my head is, I am fearful of overextending ourselves in a short window. What I would like to do is get into a multi year term loan as a buffer just in case and pay it off swiftly with money we would be spending on other things as we collapse the household finances for a while. Seriously the prices are dizzyingly high and I am trying to be as sure footed as possible.