<p>I do not qualify for fin aid other than the 5500/7500 stafford loan, and my familys EFC is roughly 15,000 which we cannot afford so the rest will be loans. </p>
<ol>
<li><p>How bad of a credit score does someone need to have in order to be denied from a Parent Plus loan?</p></li>
<li><p>how do private student loans work? Do I start paying them as I'm in school? Do I pay them as soon as I graduate? </p></li>
<li><p>Considering I will be paying both private and fed student loans, should the private loan take priority over the federal one?</p></li>
</ol>
<p>I will be working during school and over the summers from my calculations, If all goes well i could have close to 16k saved at the end of the 4 years.</p>
<p>Not impossible if the student is planning to attend a local community college followed by a local (and commutable) state university.</p>
<p>But . . .</p>
<p>(1) the OP won’t be able to qualify for private loans without a cosigner, and if the parents have bad credit, who would be able to cosign?</p>
<p>(2) trying to figure out the “priority” between private & federal loans isn’t going to help you. They both need to be repaid in a timely fashion, and if you can’t do that, the accumulating interest will quickly become unmanageable.</p>
<p>(3) If you are able to earn money during college, you need to use that to PAY your college expenses and keep any loans to the bare minimum. The interest that will accrue on those loans will far exceed any interest you’d earn on your savings!</p>
<p>The OP has some specific questions that I’m sure the answers to would be of interest to many here. I assume there are many here on CC that know the answers. OP wasn’t asking about “should I” as much as the mechanics of the various loans, at least as I read the post. Advise on “should I” can be helpful also, but how the loans work is also important.</p>
<p>As best I understand, there are subsidized Stafford loans and unsubsidized. Subsidized loans : the Fed gov. covers your interest while in school then you start paying principal and interest after graduation. Unsubsidized accrue interest while you are in school that you are responsible to pay after graduation. Plus loans you pay at least the interest and maybe principal and interest from when you get the money - so no deffered until graduation. Plus loans also have a higher interest rate (6.8% ???). </p>
<p>Someone please confirm or correct my info above please.</p>
<p>As someone said, keeping money in savings with today’s low (non-existent) interest rates doesn’t make sense vs. paying the UNSUBSIDIZED or Plus loans. Subsidized loans maybe that’s OK because no interest accrues anyhow. Plus loans have to be paid back starting at day one so you have to pay. The private loans (PLUS) need to be paid back and have the higher interest rates, so yes, I’d say pay them back as a priority over Fed loans but unsubsidized would be next on the priority list as they accrue interest that you’ll owe later.</p>
<p>How bad can credit be to still qualify for a plus loan (with parent co-signer)? Great question. Hopefully someone can shed some light on this one.</p>
<p>Keep in mind, a co-signer is a fool with a pen. If something should happen and you are unable to pay the debt, they will be responsible for repayment.</p>
<p>If you are borrowing more that what you are able to borrow through the stafford/direct loan process, you are borrowing too much.</p>
<p>If your parents are not eligible for a PLUS loan, you will be able to borrow an additional $4000 through direct (stafford loan)</p>
<p>at this rate your debt would be
9500 freshman year
10,500 sophomore year
11,500 junior year
11,500 senior year</p>
<p>$42k at the end of 4 years plus interest. Way too much debt especially if you have grad school in your future.</p>
<p>No, sorry, I forgot to mention how much I could afford, I will have between 6 and 7 thousand a year from what I put in and what my mom does, 8 at the most.</p>
<p>Will the school that you have in mind meet 100% demonstrated need without loans?</p>
<p>If not, then your loan will already be incorporated in your need based financial aid. if you school meets 100% demonstrated need:Cost of attendance - 15k then with 8k + an additional unsub stafford loan (4k) and some cost cutting, you should be good (but you will still have a lot of debt).</p>
<p>However, if you have to come up with the balance of your EFC & the GAP in your package because your school does not meet 100% need, then the school will not be a financially feasible option for your family.</p>
<p>The problem is, there are no schools close enough to me (with my major) that meet 100% of need so loans are going to be part of the question no matter what, I’m just trying to gain a better understanding of things. It’s hard because the fafsa doesn’t take a lot of other factors into consideration, If they did; I’m sure they’d understand why almost 16,000 is not doable.</p>
<p>Jazzli, FAFSA is used by the federal government to qualify you for their funds. Many states also use the information for their program, as do most colleges. Most colleges are so strapped for funds that they cannot and do not even meet what the need is for the majority of their students. So a student faciing, say a $40K bill, and has an EFC of $16K, is not likely to get the $24K he needs. The $5500 Staffords are put right towards the need component as well so it’s not like the EFC is necessarily going to be reduced by that amount.</p>
<p>Your parent will likely be turned down by PLUS if their are 90 days over due on any bills that are reported to a credit agency. It’s not done on a credit score thing. That would give you about an additional $4K, still a huge gap.</p>
<p>Maybe, maybe, your school will give you a merit award or enough aid to come up with your EFC, and let you keep the Stafford fund to go towards it, but you should prepare for the likelihood that it will not and look for other options. You need to look at some community college programs that can get you prepared for a transfer into your major field of study junior year. You get the credits and classes you need locally until you run out of courses. If you do really well in them, your chances of transferring into such programs are enhanced. </p>
<p>You can always wite a letter to the school wiht your other factors, but sadly, it is very rare they are taken into consideration because the schools simply do not have the money to meet all the need and they get every sad story under the sun, many of them hororific. I would have a difficult time working in a college aid offie as it is very limited as to what an aid officer can do, much as one might want to give all the aid one can to needy and deserving students. IF you look up the schools you can see what % of NEED they meet on average, and you can see if the school you have in mind even meets what the EFC determines as need, much less any extra,</p>
<p>You’re quite right . . . and you’re certainly not alone. There are many, many families that cannot afford to pay their student’s EFC - because of debt or other obligations, or just because there’s no way their income can cover that amount.</p>
<p>But, at the same time, there have to be limits. There are many needy students, and only limited funds. Maybe someday it will be different, but for right now, that’s the way it is.</p>
<p>The good news is that there are lots of different schools, with lots of different prices and lots of different aid plans. The trick is to find one that works for YOU.</p>
<p>You say that you’ve limited your search to schools “near you.” Not sure what that means, and if you’re looking at commuting distance only . . . but it might be worthwhile to look a bit farther afield and see if there are schools you haven’t considered where you might be eligible for good merit aid. Sometimes a school can be inexpensive enough that it’s worth it to go farther away.</p>