Help with loans and timelines?

Paying for College
1

<p>I just finished two years at a CC and am transferring to an in-state college for two more years, and I have a few questions. This CC has a program where if you meet certain specifications, you basically pay for nothing but your books. That's great, but because of that I'm clueless about FA now that I'm going to actually need it.</p>

<p>In my FA page, it lists my aid and wants me to accept/decline them. Is there a time limit on these? If I wait to accept the Stafford loans will it just go away? If so, when? Do I at least get until the beginning of school, or do I need to hurry up and hit accept (school starts in a month)? I'm not sure why I'm waiting in the first place. Maybe some distant hope of a late scholarship notice, hah.</p>

<p>My school lists an estimated cost for the year. We don't get the exact amount until a week before school starts. Is this common? Should I get a loan based on the estimated amount, or wait until the exact comes out? Will a week be enough time to get a loan? I'm assuming I have zero credit, I've never had a loan or credit card or anything.</p>

<p>I'm getting some money in scholarships and Pell Grants, but it's not going to cover the whole cost. Even if I accept both kinds of Stafford loans I'm going to need an extra loan of about 8k. Is that an outrageous amount? Or is that common?</p>

<p>Obviously I'm pretty clueless about all of this, so any help is very much appreciated!</p>

2

<p>OK… the first problem is that you can’t borrow beyond Stafford loans unless you have a creditworthy co-signer. Banks simply won’t lend to you because you have no credit history, little income and zero collateral.</p>

<p>The second problem is that, indeed, it is a problem to borrow more than the Stafford limits - that indicates that your debt load after college will be significantly more than is generally considered manageable for a recent graduate.</p>

<p>What school is it, how much is the Cost of Attendance and what is your financial aid breakdown?</p>

<p>Are your parents able to contribute to help pay for college?</p>

<p>What are your other options?</p>

3

<p>If one of my parents can’t cosign, another family member might be willing to (I don’t know any of their credit histories).</p>

<p>I’m going to the University of Oklahoma, and they’re estimating ~22k. EFC is 1770 (and if that means cash, it’s not going to happen). I’m getting 3k in scholarships, 3800 Pell Grant, and 7500 combined Staffords. Work study is offered, but I’m not working the first semester.</p>

<p>My parents aren’t in a situation where they can help with money.</p>

<p>I don’t really know of any other options besides not going to school, which isn’t an option. Maybe there’s something I’m not thinking of though?</p>

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<p>Your federal EFC is unfortunately meaningless in this context, because the University of Oklahoma doesn’t guarantee to meet full need. OU has “gapped” you by a few thousand dollars, and there’s really no easy way to fill that gap without parental contributions.</p>

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<p>Unfortunately, that is always an option, to paraphrase the MythBusters. You cannot attend a school that you cannot pay for. Even if you make it through the first semester with unpaid bills, you’d be denied enrollment for the second semester and evicted from the dorms.</p>

<p>Given that you would only be borrowing for two years (I assume), beyond-Stafford loans wouldn’t necessarily be killers, but you need to understand the ramifications of that increased debt load. You also need to understand the ramifications of having someone co-sign a loan for you - if you fail to pay it back in a timely manner, the bank will go after that person’s assets for repayment. Just signing for the loan will affect that person’s credit rating.</p>

<p>Is there a four-year state school within commuting distance of your residence? That would save you the (substantial) cost of room and board at OU. Not everyone can afford to attend college away from home.</p>

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<p>I fully intend on paying any loans back. Everyone does, of course, but I don’t know what else to say. How are people supposed to go to school if the only way to do it is, don’t go if you can’t afford it right this second? How am I supposed to have the money to go to school, if I can’t get the job because I can’t pay for school?</p>

<p>Or in other words, I’m going to school to get a job to pay for school. I’m not going to struggle financially for the rest of my life because I decided it was too risky to get a loan and didn’t go to school and had to settle for a crap job.</p>

<p>OU is the closest, just not quite close enough to live at home. The closest school to me otherwise is private and even living at home would cost more than OU out of state. By no other option, I meant that is the school I am going to; with my major, and other things and the way they have worked out, it’s that or nothing, and of course I wouldn’t go if I couldn’t get a loan.</p>

<p>I apologize if any of that sounds sounds cranky; it’s 3am. I’m not trying to start an argument.</p>

<p>Would you happen to know the answers to my other questions?
Is there a cutoff date for accepting the Staffords?
Should I apply for the loan now or wait for the exact costs to be sent out (which is a week before school starts; is that cutting it too close)?
Will the private loan let me wait until after I graduate to start paying on it?</p>

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<p>There is no cutoff date for accepting the Staffords. They’re entitlement loans.</p>

<p>Any private loan worth accepting defers repayment until graduation or departure from school. However, like the unsubsidized portion of your Staffords, interest will begin accumulating from Day One, and will be rolled into your principal.</p>

<p>You cannot even apply for a private loan until you find someone who is ironclad absolutely willing and able to co-sign for two years’ worth of private loans. Then they’ll have to undergo a credit check, sign the paperwork, etc. - that has to be started ASAP, definitely not one week before school starts.</p>

<p>You need to think long and hard about this plan, because there are a wide variety of pitfalls. What are the renewal criteria for the $3,000 scholarship? What if you don’t meet them? (That’s an extra $3,000 you’ll have to borrow next year.) What if your co-signer loses his/her job or has other financial issues, and is unwilling or unable to co-sign for the second year of loans? You’d be stuck with a pile of loans and no ability to pay for the completion of your degree.</p>

<p>You also need to rethink your plan of not working the first semester. Every dollar you earn during that time is one more dollar you can use to pay for living expenses and one less dollar you have to borrow to live on.</p>

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<p>They attend cheaper schools, take fewer credit hours, commute rather than live on-campus, or work to save money to pay for tuition later.</p>

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<p>In your case, you should accept the Staffords right away. Why would you not? You have a big enough gap that you certainly will need the money. You should also be working on getting a parent to apply for PLUS; if turned down, you will get additional Stafford money. You should also be working not only that first term, but right now. You need the money.</p>

<p>The average college student goes to college part time, eking out whatever s/he can from the budget to take courses. Probably already has a loan burden. </p>

<p>That you have only two years to go full time, taking out more than the Stafford maximums can make sense, especially if you have not borrowed anything for your first two years. That you have no local option, makes this the only way you can afford to be a full time student.</p>

<p>The alternative is to take a break for college, look for a job in a location that has 4 year colleges, where you can get a degree on a part time basis, and work, taking courses as you can afford them. As I said in my first paragraph, that’s how MOST people get through college. Those who can afford to go full time to a sleep away college are privileged. </p>

<p>When you get to school, you should have your eyes out, looking for the best ways to make money and to save it as well. Look for inexpensive room shares, on campus jobs, let the financial aid office know who you are and remind them that you need money. Once you know the ropes,from your first year there, you should be able to cut costs the next year. </p>

<p>Another option to investigate, is what you can do online for maybe half a year. That could cut costs. My son chose to do the on line version of a course he is taking this summer. He would not have to live at the school in any case, since it’s nearby, but this cuts down the half hour round trip drive, but more importantly gives him flexibility to work more hours. The class would cut right into prime working hours, and force him to go part time in the 6 weeks he’s taking the course. He also can eat a nice hot full well balanced dinner at home instead of bolting off to class. May not work for all courses, but even doing a term at home,could cut those room and board costs, drastically.</p>

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<p>Did any of the responders read this:</p>

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<p>and that the student is starting junior year with zero debt?</p>

<p>I agree that if this was an entering freshman, looking at $8K in loans a year for four years, over and above Staffords would be insane. But for two year, s/he is looking at a loan total in the low $30s, which while it is more than I would want, is not a crippling amount. It’s not all that much more than someone who maxes the Staffords for four year.</p>

<p>Furthermore, it sounds like the OP has chosen a financially responsible path open to the four-year degree; so it seems to me that some of the “take a gap year,” “go part time,” “find a less expensive school” advice is misplaced.</p>

<p>OP, if you’re going to apply for more loans, you need to do it now; the school will most likely expect to be paid, either the total amount due for the first semester or a first installment, on or before the first day of classes.</p>

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<p>I feel for this student. This is a case where I feel financial aid options should be more so that those who have “earned their stripes” successfully completing two years of college and have no public, local options for a four year degree, can board and work at getting one. To me, there is a huge difference between a straight out of high school kid applying for colleges and one who has put in the time and shown the discipline and aptitude to do college level work. </p>

<p>However, we can see here that the situation as it now stands does not have such provisions. It does put those students who live too far to commute to a 4 year school in a quandry if their family cannot afford college for them. The only solution in such cases, if loans are not available is for the student to find a job somewhere near an affordable college, as I stated earlier.</p>

<p>My opinion is that revamp of the federal financial aid situation is in order. I don’t think that paying for sleep away college for those students right out of highschool that have local options is as important or as good of an investment as fully subsidizing those who have shown their mettle.</p>

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<p>annasdad, my worry is more that the OP doesn’t really seem to know who’s going to be willing to co-sign the loans, and hence might not understand that it’s not necessarily a cinch to find co-signers - that it is not just a matter of trust, but of credit histories and financial stability. What if the co-signer backs out after a year and won’t sign a second set of loans? Then the OP is up a creek without a paddle, owing money without a degree. Private loans require him to give up some of the control over his educational plans.</p>

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<p>Another option would be establishing how far “too far” to commute is?</p>

<p>Is it necessary to have a vehicle to commute or is there some form of public transportation? And if a vehicle is necessary could you purchase a “beater” for 2 years and then commute? If attending a big state univeristy sometimes it is possible to schedule your classes on MWF or just TTH…making your commute 2 or 3 days a week. and as another poster suggested maybe a few online courses?</p>

<p>I only suggest the above as son completed his second degree at our local in-state by “commuting” and hour and a half each way. He managed to arrange his STEM schedule for 3 days a week, along with his work and research schedule. It was not easy but he was able to do it. His summer school classes were 4 days a week but for 5 weeks vs. 18 weeks. He also overloaded in units which was helpful financially because over a certain unit load tuition remains the same…15 units costs the same as 22 units.</p>

<p>Again this might not work for you but trying to think outside the box. Most of my kiddos attended community college at one point or other so coming from that environment you know what you will be willing to do to make this happen.</p>

<p>Good luck.</p>

<p>Kat</p>

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<p>Kat, My classes are 5 days a week (very specific classes for my major are only offered at these times), and would be 2.5 hours each way, which I consider too far to commute. </p>

<p>Polarscribe, my father would be cosigning. </p>

<p>annasdad, that was one thought I had, was that even with the extra loan I need, I’d come out pretty much the same as someone who’d done 4 years at the school anyway. I guess that’s why I’m treating it kind of flippantly; sure I’d rather have no loans, but it’s not like the amount I’ll end up owing will be much larger than any other typical student’s.</p>

<p>With the parent Plus loan, it has to start being paid right away. Since I’m paying my own way (granted, it won’t be until school ends that I can) I wouldn’t be able to do that. If you’re accepted, can you say no? In this case I guess we’d be hoping to be declined, for the extra Staffords as you said, but we wouldn’t want to be trapped in a loan we were hoping to be disqualified for.</p>

<p>I do work right now, for another month. I have been saving for a while, and if I do have the time I am going to get a job by the school, if not in the school itself. It’s just a time consuming major, besides class time, and I’ve been advised multiple times to see what kind of time I actually have before getting a job.</p>

<p>I appreciate all of the responses, thank you all very much for the advice. I think I’ve got a plan to go with now, and things to think about.</p>

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<p>Bootss, you can have your family apply online for the PLUS today and you will know almost immediately if they qualify or not.
If they DO qualify, you could then pursue private options and reserve PLUS as a last resort.
If they DON’T qualify, you would then know that you would get some additional stafford loan, and would have to borrow less privately.</p>

<p>In this case, remember that the PLUS loan repayment starts immediately, but since its amortized over 10 years, it won’t be a HUGE payment – eg. likely about $80 a month for 8,000 – a serviceable amount for your parents, IMHO.</p>