Student Loan with Less Than Stellar Credit?

[Aurora D]

I'm in a little bit of a panic and hoping the Disers can help! I'll speak with the financial aid office tomorrow but in the meantime......My daughter will be attending a Pa. public university in the fall. She has been approved for a Stafford loan and a small Pell grant. I went online to apply for a Sallie Mae loan to cover the rest, about $15,000 a year. I was rejected! We own our own home, never claimed bankruptcy or defaulted on anything. My husband was laid off last year and we have some med bills that went to collections along with lots of late credit payments. He's back to work and we are slowly getting back on track. Where do you turn for student loans if your credit is bad?

 

[erincon23]

Apply for a PLUS loan -- this is one that you and your husband apply for. If you are turned down for that, your daughter can be approved automatically for additional money in unsubsidized Stafford loans. It won't be a huge amount more, though -- I think it's only like $2,000 more. Hopefully the financial aid office can give you better advice. Good luck! It's stomach-churning, isn't it?

 

[travelprincess]

I'm in a little bit of a panic and hoping the Disers can help! I'll speak with the financial aid office tomorrow but in the meantime......My daughter will be attending a Pa. public university in the fall. She has been approved for a Stafford loan and a small Pell grant. I went online to apply for a Sallie Mae loan to cover the rest, about $15,000 a year. I was rejected! We own our own home, never claimed bankruptcy or defaulted on anything. My husband was laid off last year and we have some med bills that went to collections along with lots of late credit payments. He's back to work and we are slowly getting back on track. Where do you turn for student loans if your credit is bad?

Your daughters loan should be $9500 for the year, did you need an additional $15000?
If you financial circumstances have changed compared to what was on your taxes ask the FA office to file an ammendment to the current situation. She may be eligible for additional money on her pell, up to $5500.
One suggestion I have is for her to start applying for every single scholarship she can!

 

[dthogue]

The total Stafford loan (either subsidized or unsubsidized) for a freshman is $5500.00 - as the pp said, apply for the Parents PLUS loan - it will tell you immediately whether you qualify or not. If you do not qualify, your daughter will be eligible for another $4,000 in unsubsided loan, you will just need to contact the school financial aid office. Also check with your school, most of the PA State schools have a 10-12 month payment cost, where you can break your balance into monthly payments with no interest, just a small enrollment fee.

Good luck - what school will your daughter be attending? Both my DD's attend PA State schools - one will be a Junior and the other a Freshman.

Tammy

 

[Aurora D]

Yes, she was approved for $6500 in subsidized loans and a $700 grant. All FAFSA info remains the same. I'll apply for the PLUS loan and see what happens. She'll be attending West Chester University.
Thanks for the info.

 

[msmayor]

Yes, she was approved for $6500 in subsidized loans and a $700 grant. All FAFSA info remains the same. I'll apply for the PLUS loan and see what happens. She'll be attending West Chester University.
Thanks for the info.

Please double-check your 'approval'. The maximum in subsidized Stafford Loans available to ANY student as a freshman is $3,500...the remaining $2,000 in Stafford Loan is unsubsidized.

Interest on the first $3,500 is paid for by the government during the period of deferment, but the interest on the $2,000 is still charged from date of disbursement. The unsubsidized loan is still deferred while in school; you have the option to pay that off each year or allow it to accrue and capitalize to the loan balance.

 

[PammyPoppins]

Yes, she was approved for $6500 in subsidized loans and a $700 grant. All FAFSA info remains the same. I'll apply for the PLUS loan and see what happens. She'll be attending West Chester University.
Thanks for the info.

Our middle girl graduated from West Chester Univ. last year. She lived in the dorms the first two years and then got an apartment with a few girls. My daughter's first dorm was Goshen Hall. Any questions you or your daughter has feel free to ask. We did get Parent Plus loans. Also, you can make an appointment with a counselor in the financial office but do it very soon because in August they are completely booked up. People stand in line at the financial office and ask questions at the counter/desk but my experience with that is it is a student most times at the counter and they can only answer general questions and to talk to a financial counselor you need an appointment. If your financial situation has changed the counselor can tell you if they can appeal to the Pell grant for you.
My daughter had a Great time at WCU and I am sure your daughter will also. Her freshman year seems like yesterday to me.
Also, the bookstore sells used books on the shelves also but sometimes they are not as promiently displayed as the new text books. I found a stack of used textbooks in back of the new textbooks for a few of the courses she was taking
Good Luck,
PammyPoppins

 

[Aurora D]

So.......the update is I was not approved for the Parent Plus loan. I called the school to tell them and they said she would get the extra $4000 Stafford loan. Now that leaves a difference of about $10,000. I need to start looking for private loans. Does anyone know any reputable lenders? The college is not allowed to recommend anyone by law.

 

[msmayor]

Be aware that private student loans will require a co-signer, especially for amounts in the $10,000 range. If you are unable to qualify for a PLUS Loan, chances are you won't qualify to co-sign either, since the co-signer must pass a credit check.

I wish you luck in finding resources.

 

[Belle5]

OP...what happened in your quest for a private loan????

 

[Aurora D]

I was unable to get a private loan. In the meantime, I'm holding off on paying the August mortgage so I can send a payment installment to the college so my daughter can start school in 3 weeks. My sister in law has SallieMae loans for her own daughter and is looking into "piggybacking" a loan for my daughter. I'm a teacher and I waitress in the summer. I now plan to be a teacher/waitress all year Plus I'll probably tutor. She will also be expected to get a job once she settles into school.
My husband and I wrote up a budget to get our credit back in good standing. Hopefully we'll qualify for loans next year. I wonder if 1 year of timely payments is enough to straighten it out?

 

[libraryfreak]

I'm holding off on paying the August mortgage so I can send a payment installment to the college so my daughter can start school in 3 weeks.

Ooohhh..... I don't think this is such a good idea. Could your daughter attend a local community college for one year while you work something else out? Maybe she could get a job too this year.

Keep in mind next year will be even more expensive, 2-3% tuition hikes are average. Did you budget for books etc this year?

 

[*pixie*dust*]

I was unable to get a private loan. In the meantime, I'm holding off on paying the August mortgage so I can send a payment installment to the college so my daughter can start school in 3 weeks. My sister in law has SallieMae loans for her own daughter and is looking into "piggybacking" a loan for my daughter. I'm a teacher and I waitress in the summer. I now plan to be a teacher/waitress all year Plus I'll probably tutor. She will also be expected to get a job once she settles into school.
My husband and I wrote up a budget to get our credit back in good standing. Hopefully we'll qualify for loans next year. I wonder if 1 year of timely payments is enough to straighten it out?

As a parent we want to give our children everything they want. Unfortunately, that is not always possible. As difficult as it may be for you to hear or tell DD, it may be time to explain to her that you aren't in a position to send her to the school that she has chosen.

Community College for a year or two will be significantly cheaper and then perhaps you will be in a better position to help her.

 

[ajk912]

I was unable to get a private loan. In the meantime, I'm holding off on paying the August mortgage so I can send a payment installment to the college so my daughter can start school in 3 weeks. My sister in law has SallieMae loans for her own daughter and is looking into "piggybacking" a loan for my daughter. I'm a teacher and I waitress in the summer. I now plan to be a teacher/waitress all year Plus I'll probably tutor. She will also be expected to get a job once she settles into school.
My husband and I wrote up a budget to get our credit back in good standing. Hopefully we'll qualify for loans next year. I wonder if 1 year of timely payments is enough to straighten it out?

My heart just sunk a little. PLEASE think about what you are doing. You posted this on Aug 10, most mortgages I have ever heard of has the payment due on the first with a grace period through the 10-15 of the month. If you were already 10 days late on the mortgage, and you are holding off on it so your daughter can go to the college she wants...that's not good. I TOTALLY get not wanting to disappoint your kids, but I can't see how this well end welll. And that's only one payment, you still have to come up with the extra ten grand. Again, I am SO sorry you couldn't get the loan. But the community college route IS ok. I am doing it and I am doing just fine! OR..if she already has her associates (I am not familiar with past threads) it may not be her time to finish her degree. But PLEASE don't forego your mortgage payment to pay for your daughter's education.

 

[kamik86]

Wow... I felt bad for the loans my parents took out so I could go to school and it was nothing like this (even with my mom laid off they are still making the payments ok and I"m paying on mine. If they ever cant make the payments I'll pay the ones they have too). Does your daughter know about these problems? There is no way I would have gone if my parents weren't paying the mortgage and putting their house at risk... as good as my college was I could have gone somewhere cheaper if I had to.

Even if you could get the loans these loans are ALOT by the sound of it she is taking out almost 10,000 and you still need another 10,000 just for one year. If she graduates with 40 - 50K in student loans will she be able to pay them back when she graduates? Is her major something that will support this? My 20K in student loans have a payment of $200 a month just to give you an idea.

 

[csharpwv]

It breaks my heart to read this thread - as this is the case with more and more students.

I work in college admissions a public school in WV and we see more and more students being impacted (please don't take this as criticism) by their parent's financial situation, missteps or outright ignorance. I totally understand the medical bill situation - and it surfaces even more so the need for reform of the health care system in the United States - BUT it also points out the need for the reform of the Federal Financial Aid system. I see so many student abuse and abuse and abuse the system - and then drop out of college - and then I see students like the OP's daughter - who can't even get their foot in the door to start an education. It breaks my heart.

However, given the situation - you really need to have 'the talk' with your daughter about attending community college. If you don't pay the mortgage her entire educational future is in jeopardy because you will never be able to help her with school - especially with a foreclosure on your credit history.

The Federal Financial Aid system is set up for a student go to community college - without room & board. $5,500 a year (or $9,500 a year with PLUS loan denial) $5,500 barely covers community college tuition for a year these days in most parts of the county!

While it isn't what you want for your daughter - and it isn't what she wants - there comes a point when you must be realistic about the cost of education and its impact on your family's future. Especially if you have other children - you have to think about how this is going to impact them - and if you don't have other kids, you have to think about what your health and well-being will be like after 4 years of working three jobs! (Teaching, Food Service, and Tutoring) It isn't acceptable when there are other - more affordable options.

It it a little late in the game to think about scholarships this semester - most colleges start in the next two weeks- and you have already held off on paying your mortgage!

A) Do you want to lose your home?
B) Do you want to saddle your daughter with such a debt load as a Freshman in college - knowing that she will essentially have $78,000 in student debt if she has to borrow the same amount for 4 years?
C) Can you handle the loss of the quality of life that working 3 jobs will bring on?
D) The first two years of college are largely general studies requirements anyway - and the quality of education isn't going to be very different at all. Frankly some of the community college level courses I took were BETTER than my upper division courses - the professors or adjunct and had real life experience at their 'day job' - and the LOVED to teach, that's why they were there. Community College get a bad wrap that they don't deserve!

Finally - in the words of Walt Disney - if you can dream it, you can do it.

The school doesn't matter, her dedication and hard work will take her where she wants to go in life - not the name of the school on her diploma - or where she spent the first two years of college!

Save your self - and save your money!

 

[csharpwv]

Wow... I felt bad for the loans my parents took out so I could go to school and it was nothing like this (even with my mom laid off they are still making the payments ok and I"m paying on mine. If they ever cant make the payments I'll pay the ones they have too). Does your daughter know about these problems? There is no way I would have gone if my parents weren't paying the mortgage and putting their house at risk... as good as my college was I could have gone somewhere cheaper if I had to.

Even if you could get the loans these loans are ALOT by the sound of it she is taking out almost 10,000 and you still need another 10,000 just for one year. If she graduates with 40 - 50K in student loans will she be able to pay them back when she graduates? Is her major something that will support this? My 20K in student loans have a payment of $200 a month just to give you an idea.

Common rule with federal student loans is that you should figure on paying at around $100.00 a month for every $10,000 you finance - so if she is borrowing $20,000 a year - that will be about $800 a month by the time she graduates. It may be a little less than that considering that 1/4 of her loans (approx) will be subsidized Stafford Loans. Plus if she allows the interested on the unsubsidized loans to capitalize, it's going to be even tougher!

The best advice I have heard from a financial aid professional is that student should not borrow more per year than 1/2 of what their expected salary will be. it should actually be closer to 1/4 of there expected earning potential. That is tough news for teachers, seminary students, musicians, artists, and journalists!

In the end the decision will make itself - I know that sounds a little harsh - but missed mortgage payments are VERY hard to get caught up on! If you don't have $1000 this month - chances are you aren't going to have $2,000 next month!

 

[cassandrap83]

College is a joke. Only the really poor & really rich can afford it, really.

I feel for you OP, I really do. Good Luck.

 

[ccgirl]

Can she commute to the college?

My mom was a single mom and did all she could for us. She simply did not have enough money to send us to college. What did I do?? I worked very hard for it. It took me much longer than the average student because I had to go every other semester for a while. I would go to school for one semester than work full time for one semester. Was it easy; no. But...I did it and did it all myself! I went to Northeastern University for one year. Would I have loved to stay - of course but I just couldn't afford it.

Have a talk with your daughter...be honest and tell her there is simply no money for college. I seriously doubt you will be eligible for loans next year if you can't get them now. Especially when you are saying you are going to be late on your mortgage so you can send school the money.

Good luck.

 

[kamik86]

The best advice I have heard from a financial aid professional is that student should not borrow more per year than 1/2 of what their expected salary will be. it should actually be closer to 1/4 of there expected earning potential. That is tough news for teachers, seminary students, musicians, artists, and journalists!

Depending on what you want to do after school this can vary though. my student loans are 1/3 of my first years salary so more then the 1/4 you recommend however they were almost all subsidized, and my salary was 60K so the 200 a month payment was ok. If my salary has only been 30K a 100 a month payment for a 10,000 loan would still have been harder so percentage rules can be deceiving sometimes. Also keep in mind job prospects if the economy doesn't improve before or only improves shortly before she graduates because if there are 4 years of students before her that weren't able to find jobs even if the economy has improved there will be alot of competition for a few more years. I was lucky to have a major that is still not having too many issues finding jobs. Espeically if your willing to live in some of the "less desirable (meaning not huge city) areas"