Financial situation for my sister

Paying for College
1

<p>Hi all, I am writing this to try and help my sister.</p>

<p>She completed a bachelors degree in psychology, and was working at a drug counseling clinic on an hourly basis for a while, earning about $35-$40k per year on an hourly independent contractor type basis. As of last year, she had around $40-$50k in student loan debt, and was paying rent on an apartment in the city where she went to school. This job, however it worked, was not subject to social security coverage or to federal tax withholding at all; you were expected to file your own tax return and pay a lump sum on april 15th.</p>

<p>Very unwisely in my opinion, my sister got a cat, a dog, and a new truck (~$20k auto loan) at this time, leaving virtually no money to live on after rent, student loans, tax reserves, etc. Obviously, the budget fell apart and she ended up not paying the IRS in 2012 at all. To make matters worse, her drug counseling clinic was not exactly a model employer, and got raided by the state equivalent of the DEA (with the owner arrested and facing felony charges) late last year.</p>

<p>So, she broke the lease on her apartment and was left with all of this debt, unpaid taxes, the animals, and no job, and moved back home. She's done some part-time unskilled work in the previous few months.... she wants to go back to school (for 1-2 semesters) to earn a 2nd bachelors degree, with that degree being required for admission into a masters program that should pay $60-$70k after she is done. This is a bit risky because the masters program is difficult to get into, but lets ignore that for right now.</p>

<p>The issue is that, despite this mountain of debt, she says that she is unable to get a student loan for $13k/semester to pay for the 2nd bachelors degree because she is not being allowed to apply as an independent student; they'll only give her $3000. My mom has a decent income ($50-$60k?) but is also in debt and in no position to loan her even $1000, let alone $10000. So, it appears as if she is stuck.</p>

<p>Is this really true that she can't get a government loan? I am unfamiliar with all of this (not being a parent) and am asking for any advice or help with this plan of hers.</p>

2

<p>There is. It a lot of money out there for second bachelors degrees.</p>

<p>You say your sister is not being considered independent for financial aid purposes? Why is that?</p>

3

<p>She is probably under the age of 24, in which case she would still be dependent.</p>

<p>There is not much aid for 2nd bachelors degrees - pretty much just loans, and for a dependent student it is limited by the year in school to $7500/year or less (yes, she can still get a Stafford loan).</p>

4

<p>Is she considering something in the medical field? Could she get pre-reqs at a community college?</p>

5

<p>She is under 24, but turns 24 in late June. Does that help anything? Probably not as that’d be past the application date for the Fall semester?</p>

<p>Yes she is continuing in the medical field… I dont know if she thought about community college, but Id guess that she doesnt want that on her resume since the Masters program is competitive.</p>

<p>I dont know if she realized that $7500 of stafford was available. That along with the $3000 would leave her just $2500 or so out of pocket, which she might be able to figure out.</p>

<p>Thanks for the help so far.</p>

6

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<p>This is an issue? As far as I can tell, it’s a blessing! If she already has a “mountain of debt,” how is she possibly ever going to be able to pay back an additional $13k/semester???</p>

7

<p>It’s only 1 or 2 semesters to complete the 2nd bachelors. I have no idea what the masters program will cost. I estimate that she’ll owe… $10k+$25k+$15k+$13k+2*$15k = $93k when she finishes her masters. Thats pretty horrible but not ridiculously bad if you can land a $65-$75k job. At least you’re afloat and can make progress from that point.</p>

<p>What would make that better: If I was her I’d give away the animals. I’d also sell the truck, eat the loss on the auto loan, and drive a series of $500-about-to-break-down beaters until the other debt was under control.</p>

8

<p>She doesn’t need more student loans. She needs a good paying job. It you really want to help her then network and see what leads that you can come up with. GL</p>

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<p>a masters program that should pay $60-$70k after she is done</p>

<p>I don’t understand. The masters pays, or she is guaranteed or expects a job? It would help to know what job that is. Not many are guaranteed, and it could take quite awhile to pay off.</p>

10

<p>Sounds like physicians assistant or something like that…and the sister needs the science/math prerequisite courses. </p>

<p>Does she HAVE to get a second bachelors, or could she just take the courses she doesn’t yet have?</p>

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<p>Bigbaby, before you say no to a community college, I would suggest your sister talk to an admissions counselor at the Masters Program. They may have experience with people in same situation as your sister (and yes, agree with get rid of animals and truck).</p>

12

<p>First of all, if she is going to have ANY options in borrowing for future ventures, she had better be current on her student loans. Since she won’t be 24 until late June, she can spend the time now getting that cleaned up. </p>

<p>Please have her check the programs and hiring situation for what she is planning to get v-e-r-y carefully. Really, most people are far TOO OPTIMISTIC about what they are going to get paid and how quickly they will find that job when they get some sort of certificate or degree. I was just looking at mechanical engineering job prospects for a friend whose son has not been able find much, and hidden in all of the spin was the ominous fact that it is getting difficult to find jobs and the pays are not so hot in that area. You focus all on the positive and reading the stuff would make you think your kid is going to have a $60K job waiting for him after he graduates. Hardly.</p>

<p>My son just got a very good job, but it took time and work and a willingness to relocate and look high and low. It was very difficult to jar him out of his complacency and into the mode of finding such a job. He really was in a rut of not doing it. And I see this a lot. It’s always more comforting to look at the grand possibilities of the future, rather than the realities of the right now and what can be done to better ones self at the moment. </p>

<p>My other son’s SO is embarking on a master’s program that will at the moment guarantee her a $10K raise in pay the minute she gets the degree at her present place of work.It’s going to cost her $80 K and about 3 years of time to get the degree, and she is hoping that it parlays itself into even more than that, but when my son sat and did the research and translated to the NOW and the reality, it’s a $10K a year certainty. Still a good investment, in that jobs are easy to find in her field, and she won’t get much more than she is making without the advanced degree as she is with a top employer right now. But let me tell you, no one liked facing the realities and hard numbers of it. Yes, she will make out, but not as much as you would think, it will take a while for the payoff, and she is going to be suffering working and taking those classes for the next few years, in that she will have little or no money. By the way, she is NOT taking out loans for this, or so she plans. Doing so changes the numbers and benefits even more. </p>

<p>There are limits to UG loan money, so that if your sister has a degree already, going into a graduate program will open up more funds to her. It’s not too late to get federal funds right up to the date she has to pay for the course, but since she has already borrowed, that will affect what she can borrow for a second ug degree. </p>

<p>The young lady I was referring to, my son’s SO, had to take some courses, which she did at a cc and other state college to have the prerequisites for the master’s program. That took her two years, and she worked as she did this. She had hoped to get into a state program which would have cost her very little, but two years of applications did not snag her a spot, so she is going to a private school which is really whomping her big time in tuition costs, but she’s invested 4 years in examining her options, working in the field and trying different venues, so she knows what she is doing. </p>

<p>I suggest your sister take that kind of time and contemplation too. I see too many kids owing too much money for courses and education that did not have the payback they were expecting. I am very skeptical of most second bachelor degrees. Very rare that supplemental courses or certificate programs won’t fill the gaps, especially for someone who hasn’t been out of school that long. It’a whole other thing if someone like me wanted another career path, but your sister’s not even 24.</p>

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<p>I think right now she needs to focus on getting her loans up to date and getting her taxes paid. The mountain of debt can derail her for getting grad plus loans over the 20k stafford limit as a grad student. the balance, which she will have to take as a gradplus loan will be based on her credit worthiness, Unless she cleans this up, she wont be in a position to get additional loans for school.</p>

14

<p>I agree with Sybbie. She needs to get her life together without the complication of school. Too many people think that going to school is an out for other problems that should be under control first.</p>

15

<p>Don’t mess with the IRS. If she’s behind on her taxes, that needs to be job one to clear up. </p>

<p>She’s in no position to take on debt; it would only be compounding one mistake with another.</p>