My son is looking into trying to build enough credit to become eligible to get a private college loan. We (parents) have 7 kids and one income, so co-signing for him will affect future children’s abilities to get loans also…
Honestly, he wants to do this on his own as much as he is able.
He already has a student credit card through Discover and is using it responsibly to pay for gas,etc and pays off monthly. He is also looking to purchase a vehicle and has about $4000 saved. He “could” pay cash for an older car, OR he can put some money down on a car loan and then pay off. He has a great summer job (working construction), and during the school year he works about 10 hours a week. Would these two things allow him to build up enough credit for him to secure a loan that we wouldn’t need to co-sign?
The things he is doing are good. Using the CC wisely and paying off in full every month.
But it will take a while to establish credit and they might require a full time job or certain income and possibly a certain age in addition to a good credit score.
How much in loans does he need? He can take about $5,500 to $7,500 in student loans from freshman to senior year without a cosigner.
Without an income stream, I doubt he can get private loans. If he doesn’t have high enough states for scholarships and you don’t qualify for enough need based aid, then his best route is probably to live at home and attend a CC, and finish at a local 4 year college if there us one. Maybe taking a semester off as needed to earn more. He can take his federal loans ($5500 freshman year). Good summer earnings like construction can help, too.
What are his stats? What is your home state? What does he want to study? Have you run any net price calculators on the school websites?
Having good credit is on,ynoart of the “getting a loan in your own name” equation. If your son doesn’t have sufficient income and assets as collaterol, he will not get a loan in his own name.
The lending institutions want to be certain that the person has the means to pay the loan back. Without sufficient income, that’s just not going to be a happening.
I will add…owning a car when one NEEDS money might not be the best plan. Cars take money to maintain and use. Why wouldn’t he use that money towards college costs?
Also buying the car and immediately paying off the loan is not going to help. Regular payments over time are better, but then that would affect debt/income ratio.
And I agree, car ownership can be costly with insurance, gas and maintenance.
He is definitely considering going to CC, but he has already been dually enrolled there for a few semesters during high school. He is running out of classes to take there that will actually transfer to the college he is looking at. He feels like getting his AA is a waste of time because the additional classes the CC wants him to take won’t transfer for his major (mech engr). His test scores aren’t great (ADHD, reading learning disability, disgraphia). ACT 22 and GPA 3.4 unweighted. So he isn’t going to get great scholarships.
His preference is to go to Cedarville as a freshman with advanced standing. He can either finish in 3 years then or, if he struggles at all with the heavy courseload, he can spread fewer credits over 4 years. Net Price Calculator is predicting COA as $21,674. That is a crazy amount of money to me, but it is one of the cheaper schools that I have run a NPC for.
Second option is to stay at CC to finish the rest of the classes he could take that would transfer and then transfer to CU. State Schools Engr programs are practically impossible to get into here…
There are a lot of “CU” colleges. Which one are you referring to? Also, engineering is going to be a very, very tough major for a kid with a 22 ACT. Honestly, he needs a backup major in case that doesn’t work out, and whatever school he attends should offer that 2nd major. Can he live at home and go to any college (CU that you mentioned, for example)? That is the best way for him to keep costs down.
As an aside, is he getting accommodations now for his learning disabilities? If they are documented by a medical professional, he may be able to get extra time on the SAT or ACT, and bring up his scores.
Also, I don’t know if you’ve been looking at the other financial aid threads, but are a couple of links to look at. Note that some of these posts are a few years old, so look at the college websites to see what is available now. But you still might find some items of interest:
He needs to speak with the transfer advisor at his CC. There may be a formal articulation agreement between that CC and an in-state U that offers his major. If so, finishing the particular AA or AS program with ther required GPA will guarantee him a spot. As an engineering major, he should take advantage of any coop program at his eventual U. That will give him a chance to make some money along the way.
An ABET school is going to require 15 elective courses. Some schools have specific requirements for those (English w/writing, econ, history) but those can be taken at the CC. Make sure they are the right level and that they will transfer. He’s also going to need Calc I, II, and III, chem, physics. A 4 year school would have those even if engineering isn’t offered (Towson?) and they can be transferred. At least one year of required core courses can be taken outside an engineering school and transferred in, and maybe two.
For merit aid, things don’t look that promising with an ACT 22. He’s got to get it higher. Does he have accommodations for testing (more time, quiet room)?
Morgan State offers engineering (general, civil, physics) but I don’t know if you live close enough to commute. Florida A&M is another HBCU that shares facilities with Florida State for engineering, and they do have a lot of scholarships available but I don’t know the requirements. Georgia Southern offers engineering and has lower average ACT scores (but I don’t know about engineering).
Isn’t Cedarville in Ohio? There are lots of ABET accredited engineering programs in Ohio. Youngstown State, Toledo, Cincinnati, Akron, Cleveland State. Can he commute to any of them?
Talk to the departments and find out how transferring from community college would work.
My husband financed his undergraduate by credit card – running up balances and paying them off by working multiple summer jobs. Not exactly the most economical solution in terms of interest rates, etc, but his only option st the time.
Monthly payment plans through the school could be an option that doesn’t require a cosigner as well.
For those questioning the car: it’s often necessary to get to work.
But those questioning Cedarville are right: a private school that does not meet full need should be off the table. Look at your in-state and regional compact schools for lower price tags.
@thumper1 It definitely depends on the amount of money you are short and the local cost of living! Also he was a “junior” and his dad gave him one of his credit cards so he had a much higher credit limit available than he rightly should have. (And he didn’t build his own credit rating in this process.)
I’ve been building my credit since I was 16 and still would have a hard time financing an education on my credit cards- and I’m 26!
Sorry, thumper is right. What worked a generation ago will NOT work today. The OP’s child cannot count on their credit cards as that will negatively impact their credit- something they’re looking to avoid- and unsustainable given the next 6 kids in the pipeline.
There is a way for him to get a ME in 4 years from University of MD at Frostburg state: http://static.frostburg.edu/dept/engn/
He is likely to be admitted there with his current stats. He could pay for tuition with Federal loans and summer earnings. The issue is room and board - that would have to be covered with private loans.
If he can commute to Morgan State, that would be the more affordable option.