1st time loan borrower

Paying for College
1

<p>Hello I am an undergraduate student, starting their college career in the Fall ( i begin classes late august) and need help with my loan options. I've called my university numerous times but I still cant seem to grasp the understanding of taking out loans that are actually necessary.</p>

<p>My COA- 42,416
Ive been awarded- 41,216</p>

<p>In my award letter I've been given 3 loans that of which are a Federal Direct Subsidized Loan of 3,500 combined semesters, a Federal Direct Unsubsidized Loan of 2,000 total for both semesters and lastly a Federal Direct Parent Loan of $17,829 being a 8k for one semester and another 8k for the second semester.
I need to understand fully what this means. Do i have to take the Direct Parent Plus loan? If not are there other ways that I can pay for loans w.o parent assistance or loans that can be under my name? and Should I also take both the Subsidized and Unsibsized or only one?
As of now according to my "bill" I owe $17,710 of tuition. Of that $8,974 is the 1st payment due in 2 weeks. Now my question is do I take out a loan for only the amount due or of the tuiton I owe? Any knowledge on this topic will be helpful, Thank you for taking out your time to read, any feedback i get would be extremely helpful.</p>

2

<p>Sorry to bring you dire news, but this financial aid package of primarily loans is not going to work. The “Federal Direct Parent Loan” is a loan only your parents can take out–and they need to qualify for it credit-wise. There are no loans you can take out in your own name in substitute, however, if your parents are turned down for the Federal Direct Parent Loan because of poor credit, you will qualify for an additional 4K in student loans… but that would still leave a gap of 13K or so of the 17K gap you need to fill.</p>

<p>You will NOT qualify without cosigners for a 17K loan of your own. It is likely insane for your parents to take out 17K in loans for you and they may not even qualify.</p>

<p>You need to talk to your parents immediately and see if it is even feasible for them to pay or take out loans of 17K per year… and if not, seek a different college. Take a gap year and apply for more affordable (local?) college. Consider community college and transferring to a local/cheaper college later as well. </p>

<p>Unless your parents can actually afford that 17K figure per year, this college plan is dead in the water.</p>

3

<p>OK, let’s see if I can help. I’m sure others will jump in but you have issues you need to work on right away.</p>

<p>You’ve been given a total of $23,329 in loans. You said your aid package was $41,216. The $23,329 in loans is part of your aid. I assume that the difference of $17,887 was some combination of grants and work study? If so keep in mind that the work study has to be earned - only then do you get the money.</p>

<p>You have $5,500 in Direct (Stafford) loans. This is the max you can take Freshman year unless your parents get denied the Plus loan (more on this in a minute). This $5,500 is the only loan you can take in your name except for the Perkins loan which it does not appear you have been awarded. You can’t sign up for that - you either qualify or you don’t.</p>

<p>In order to get the $5,500 in Direct (Stafford) loans credited to your bill you have to sign the promissory note. Most colleges do this online. Ask yours. Keep in mind that you have to pay this back after grad. NYou will need to take these loans (in increasing amounts) all 4 years and if you declare bankruptcy these loans are not discharged.</p>

<p>The $17,829 in Plus Loan is not really aid. Your college gapped you. They are saying your parents have to take out this loan. It is not in your name. Your parents have to pay it back. Again, it cannot be discharged in bankruptcy. It looks like they would have to take out the Plus loan in at LEAST this amount every year. Are your parents willing to do this? They will be taking out well over $70,000 in loans for 4 years. Do they have good credit and can they get approved? Keep in mind that some parents get approved the first couple years and then get denied after that because they have too much debt. What will you do then?</p>

<p>If your parents get denied the Plus loan then YOU can take out an additional $4,000 in loans every year. That still leaves you a huge gap.</p>

<p>You can’t take out other loans in your name (private) without a co-signer. The co-signer has to have good credit and is responsible for paying the loan if you cannot.</p>

<p>So you have to come up with two amounts. First, the $1,000 difference between your “aid” package and the COA. Do you have that?</p>

<p>Second, something needs to be done ASAP about the Plus loan. Will your parents take it out? Do they understand they will need to do this every year most likely and what the payments will be?</p>

<p>The Plus loan is a separate app. The college can help with that. Once the loan is approved the amount is credited to your bill.</p>

<p>IMO the amount of loans you are being asked to take is WAY too much. Frankly unless you have another source of funds (savings, 529 acct, etc) you can’t afford this school. You need to go to a school you can afford that does not require your family to take on a dangerous amount of debt. Do you have a backup plan?</p>

4

<p>Thank you annikasorrensen and iron maiden i really appreciate the feedback you helped out alot.
@annika: I spoke to my parents and my dad was willingly to take out the loan but his credit isnt good. I believe my mothers credit is the same as well. and i put my father as the PLUS and was denied.
I did apply to other state school but was denied due to my sat scores even though i had a high gpa but cuny/suny schools changed their requirements for sat scores this year so i wasnt able to go to a cheap state school even though that was my 1st choice :(</p>

<p>@Ironmaiden: I dont plan on staying at the 4 year university since i know i cannot afford it and planned on going to a public state college but wasnt accepeted. My plan is to stay for a semester then transfer for a local school the following semester but i might as well stay for one year , keep a high gpa and transfer to cuny/suny schools in NY. I have the 1000 difference but the PLUS loan was denied. I will get the 4000 in stafford loan which equals 1,900 every semester but im still left with a 8k balance. I hoped that made sense. which means i still have to take out a private loan?right?</p>

<p>My question for the both of you is if i stay for one semester wouldn’t my finances be smaller and how should i go about paying for it via being denied a PLUS any pricate loans that are good?, or should i stay for one whole year and transfer then out since one semester wouldn’t be enough credits to transfer? and what options do i have now since i’ve been denied the PLUS</p>

5

<p>I don’t think you can stay a your intended college for a semester or a year–even with the additional 4K loan resulting from your father being denied the PLUS loan. There are no other options available beyond that additional 4K loan unless you find some other qualified cosigner, but it is insane to go so far into debt for college.</p>

<p>Just to be clear, there are no other places for you to go for a private loan. Without a cosigner, you simply do not qualify for private loans. You need to afford the college based on the Federal Loans you were offered–that was the limit. The only extra option for you is that extra 4K in Federal Loans that you qualify for since your dad was denied the PLUS, but I do NOT recommend taking that extra 4K. You are maxed out on Federal Loans, there are no other options without a cosigner.</p>

<p>Since you plan to transfer anyhow, why not start at a community college instead?</p>

6

<p>It is very unwise to try to go to this school. Your family can’t afford the debt and they can’t afford to pay. It’s actually a good thing that your dad was denied for Plus, you would have had too much debt. I know that your dad was trying to help, but having parents with bad credit trying to take on MORE debt is really just a horrible idea.</p>

<p>This school isn’t affordable and is expecting you to drown yourself in debt. Your life would be ruined. </p>

<p>If you try to go to this school, you’ll likely end up having to leave at some point, without the degree and will HUGE debt…very bad. You could also end up owing the school a lot of money and then get stuck because another school will NOT let you enroll while you owe another school money. </p>

<p>Start at a community college, then transfer to a CC.</p>

7

<p>*@Ironmaiden: I dont plan on staying at the 4 year university since i know i cannot afford it and planned on going to a public state college but wasnt accepeted. *</p>

<p>think about what you’re saying. It is a terrible idea to take on a bunch of unnecessary debt to attend a school that you’re not even going to get a degree from!!! Think about it. When you’re out of college and paying back that debt, you’d be hitting yourself on the head for allowing that debt for a school that you didn’t even graduate from. Your degree will be from a less expensive SUNY or CUNY. So, having debt for a pricy private is insane.</p>

8

<p>It makes no sense to go to this school at all. You don’t have the money and even if you did it is a bad idea to pay the high rate and then transfer out. </p>

<p>You need to start at community college and then transfer after two years. That is the smart way to do it. </p>

<p>Your other option is to take a year off and work to save $. Don’t take any classes. Re-take your SAT and get the scores up. Re-apply to the SUNY. You would still be coming in as a Freshman and would have the best chance for aid then. Transfers don’t get good aid. </p>

<p>Take a lesson from your parents bad credit. Minimize the loans you take out. The fact that your father has bad credit but was willing to take out a $17000 loan is frightening. </p>

<p>Withdraw from this school immediately. I’m sorry but there is no way for you to afford it, even for a semester.</p>