<p>So, let me put some backstory to this.
My aunt has always said that she will help me pay for college. Now the time has come that I need help for college. </p>
<p>Her sudden plan, a week before my damn deposit it due, is for me to find a private loan that she will cosign, and those loans are the ones she will pay. I'm personally taking out 5500 a year from Stafford loans. I don't mind paying those, that's nothing. However, at the end of my 4 years, I will (Or she will, technically) have around 60k in private loan debt. </p>
<p>Brick houses are literally coming out of my bottom thinking that there is a possibility she might be "lol just kidding" and leave me with 60k in debt in private loans, along with my 20k.</p>
<p>Advice? Anything at all. I'm literally gonna spend the entire afternoon searching up private loans. I don't think she will do that to me, but I am so afraid! </p>
<p>To be honest, unless I go to community college, I can't really go anywhere. I am very poor (family of 4 making around 25k a year) so it's not like I can get a job and save up that amount to go where I want to. </p>
<p>This year, the government is taking away my portion of social security checks, so I'll probably end up working to give the money to my family so we don't end up on the street.</p>
<p>It sounds like you are suspicious of your aunt pulling a ha-fooled-you. She should know your current familial and financial situations. Sit down with her and have a talk about your financial dilemmas. If this is serious (it sounds like it is), just gut up and ask her point blank if you could take her up on her word. Tell her how precarious your situation is and ask whether she is willing invest fill-in-the-blank amount of money for you and for your family. That’s the most you can do with your aunt. If she won’t help you, she won’t help you. Don’t grovel. Just move on. Have you applied for financial aid, scholarships, grants? You also need to talk to your counselors about that. I would ask you more detailed, substantial questions, but I know little about your situation since your backstory was brief.</p>
<p>If your aunt is SERIOUS that she will pay back those loans, then she doesn’t need you on the loans AT ALL. She can borrow in her name only, and she alone will be responsible.</p>
<p>It’s very risky doing what she’s proposing; she may not pay and then you’d be stuck if these are co-signed loans.</p>
<p>You need to talk to your aunt and get the hard truth. Was she “talking thru her hat” when she said that she’d pay, and now she’s seen the actual numbers and can’t really pay?</p>
<p>Stafford loan debt alone is not “nothing” when you start having to pay it back. This is just year one. I’m not sure what to tell you on this one. Here’s the deal: if your aunt can’t or won’t pay, even if she is disabled, or even dead, when it comes to the co signed loans, you are still liable for every penny of them. With that kind of monkey on your back, getting a job, apartment could be a problem You are talking about $100K, probably more in debt after 4 years, so yes, you should be worried, when you have family that is needy on top it all. </p>
<p>I suggest you talk to your aunt, and see if she can’t do something to mitagate your fears, like put up half the money in cash and cosign the other half. Even then, it’s a lot of money that 's going to be on YOU to repay as well as her. Do explain to her that you absolutely cannot owe that kind of money and there needs to be some insurance that if anything happened to her, you are not stuck, given that your family’s situation is dire financially. </p>
<p>Also, do think long and hard about your options and whether this is one you should even be taking. It looks like you got into an expensive school with $20k a year or so that you need to come up with. You are borrowing the $5500 from the Stafford Direct Loan program and your aunt was going to come up with the $15K that is left to pay. Let’s see if you can get her down to $7500 in loans and $7500 paid up starting with the deposit, and then the first term amount of $3750 less said deposit. Still too much in loans, IMO, because it means borrowing $7500 with your aunt that first year. Let her know that where she does her banking is likely the best place to look for such loans. Or maybe a HELOC (home equity loan,) or one against her 401K. Those would have better interest rates.</p>
<p>It is possible that the amount if money your aunt had in mind when she made this offer was significantly different from the amount that you are asking for. Think through the other options on your college list. One of them might be workable with the amount of help your aunt is truly able to give you. If nothing in your list is workable for this year, take the year off. Get a job. Save some money. And work together with your aunt and your mom to find a new set of colleges to apply to for fall 2014 that the three of you know will be affordable in your situation.</p>
<p>I mean, I don’t think she’ll leave me hanging, because since she’s the cosigner, it’ll mess up her credit as well if I can’t pay it, and she won’t pay it. It’s just a worry I have in the back of my mind.</p>
<p>I don’t know where to even start. Do I go through Sallie Mae’s “Smart Option” loan? Do I find a private bank loan somewhere? Do I use variable interest rates or fixed? This is so confusing!</p>
<p>If everything goes as planned, what will end up happening is that I will have on my back around 25k of loans (including interest, at the end of 4 years) myself, and she will have around 80k (with interest at the end of 4 years) that she pays. Currently, she’s in Hawaii on Vacation, so I haven’t been able to talk to her too much. In passing, when talking to her quickly about this, she mentioned that she will be the one paying the loans.</p>
<p>According to her, it would be easier to pay off a loan that is around 80k in 15-20 years, than have to pull out around 15k a year.</p>
<p>I would advise you not to co-sign for those loans if you were my child. Yes it would also mess up her credit if she did not pay it back, but what if the unexpected happened and she were to pass away? I realize it may not be likely, but it is certainly possible. In that case, you would be stuck with those loans. It is a huge risk for you. LIke someone else already said, if she were really serious, she would take out the loans in her name without a co-signer. You need to have a serious conversation with her to find out what her expectations as far as the amount were when she told you she would help. At your income level, are you sure you are not eligible for any other grants or state aid?</p>
<p>More likely than her passing away is her becoming ill and incurring huge and ongoing medical bills that prevent her from paying back the loans. I agree that if it is her intention to repay the loans, she doesn’t need your name on them. In fact, she may be able to procure a better interest rate using an equity line or another credit source other than a student loan.</p>
<p>Here is the problem about these loans which you don’t seem to be paying attention about. If she dies, becomes disabled or loses her money, they are all on your back. Also, she might be able to afford taking a hit on her credit better than you. She already has her house, her job, and might have the income and assets that the loan amount outstanding is not a deadly ratio. </p>
<p>You, on the other hand, when you get out of school with nothing else on your credit report other than all of those loans are not going to look so good. No income yet, no assets, no secure job, no house and all loans. You danged well better not miss payments because it will be deadly for you. And a lot of jobs do a credit report. With that kind of debt some jobs in security, banks, are not going to happen because it looks like you are really in need of money which puts you in a high risk category for fraud, theft and bribery. So, yes, you have a lot more to lose than she does.</p>
<p>Yeah, this is a real bad situation. If she can’t come up with the money NOW, then how is she going to pay it back with heavy interest later? She could spread it over more years, yes, but all the while accruing a high interest rate and more and more debt. Plus, if she co-signs, then it’s YOUR loan as the primary person to pay it back. If you can’t/won’t then they’ll look to her. </p>
<p>Sounds like a very sketchy plan to me. What other options have you considered - other schools that cost less?</p>
<p>btw, I’d say $25k income with family of 4 is pretty poor.</p>
<p>A family of 4 with a student that is college age is a whole other story than one starting out in marriage or an older couple with maybe one just working at this point. When one looks at the income levels, I feel it is important to take the income in context of with other families with college aged kids rather than averaging the entire spectrum. Having a 4 person household with two kids in school and making $25K a year is a tough go, IMO. Around here, finding any safe housing not ready to fall apart would be a problem for even one person at that pay range, let alone a family of four. For what it’s worth, the EFC is zero. I’m sure and the OP cannot realistically expect the parents to be contributing anything towards the college. Serious consideration should be given about commuting and going to local state school, taking out NO loans and working part time. I’d also recommend looking at fields in which to major where a good job is likely to be found at a good salary. A field like accounting, maybe. For most kids, it’s not that important, but when family is hurting financially, which OP indicates, and the family income is that low, for the OP to be able to best get out of this rut and maybe even help the family out somewhat, these considerations can make a big difference.</p>
<p>For all intents and purposes, no one in my immediate family has credit, we are family of 4 living on 25k, and everyone is disabled with health problems, no job. It may not be what the government determines to be poor, or some other medium but I personally am not living too comfortably, facts aside. I know it’s like this with a lot of families, and I know a lot of people have less income than I do. I was just trying to let people know my situation. Can we stop discussing of how poor am I on different levels?</p>
<p>I do not have any other “local school” except for community college. I don’t know how much I’ll actually be able to save a year to go to another school, so I’ll have to stop after 2 years? Because, as I said, most of my job money will have to go to helping my family, but when I fill out my FAFSA, I might get even LESS help than I do now, right? Might as well not go, and invest in like a technical school where I can get a job ‘quickly’ compared to having to struggle to put myself through 4 years.</p>
<p>According to her, it would be easier to pay off a loan that is around 80k in 15-20 years, than have to pull out around 15k a year.</p>
<p>but here’s the thing. Even if she can’t pay out $15k per year, how much can she pay for next school year? If she can’t pay ANYTHING or much, then that’s a strong suggestion that she won’t be able to pay back the loans. </p>
<p>I think it’s odd that she can’t pay ANYTHING for next year (or any school year) and wants to borrow the entire owed amount. If she can’t pay at least $500 a month towards your college while you’re in college, then she’s not going to afford making larger payments later. </p>
<p>BTW…you’re going to have more than $20k in debt. Each year, your student loans will increase. You’re going to have about $27k in debt (plus accumulated interest).</p>
<p>You have to talk this through with your aunt. Are you like a child to her? If that is the case she may feel this something she has always wanted to do. </p>
<p>Loans are extremely risky. There is no guarantee she will get them again in the future. She may find it to be too much and stop. And then left with no options to drop out. </p>
<p>How much aid did you receive from this school?</p>
<p>Full rides are a much better option. Yes, it’s easier for aunt to borrow money, but the problem is that aunt is not borrowing money alone but linking OP full with her on the loan, and if anything happens where auntie can’t or won’t pay, the OP is just as responsible for the loans, and frankly, this person cannot afford these loans even if the aunt can.</p>