Hi!! 1st post here. So:
I’m not in college yet just considering it. My parents don’t need to get parent plus loans since I’m going to junior/community college. But, if I graduate from junior college and can’t repay the loans right away, will my parents have to pay for anything? Since they would help me fill out the FAFSA with their information, would the lenders make them pay for a Stafford loan?
The loan is in your name.
If you are not able to repay it, your parents are not obligated to repay it.
It will be you who will have the bad credit rating.
If you need to continue your education, it will be you who will not be eligible for aid in the future if you are not repaying your loans.
Get used to these terms: deferment, forbearance, delinquency, default, garnishment etc. Also filing bankruptcy will not eliminate your federal loans.
https://studentaid.ed.gov/sa/repay-loans
^some good info about student loan repayment in link above
When you graduate, you will take exit counseling. It should tell you what you need to do to repay your loans.
You should know who your loan servicer is and when your first payment is due. You can choose your repayment plan.
If you run into financial trouble, contact your loan servicer right away for options.
You do not want to default on your loans, it can impact your credit, employment, and eligibility for future aid.
If your address or name changes, make sure you let the loan servicer know.
^^^ even as an adult those terms just scared me right now! all kids should read this one.
Thanks everyone…but I was talking about worst case scenario, and not the one that would apply to me. I just need to double check that in the worst case scenario, my parents won’t have their information/credit/finances affected.
I need more people to specifically answer my question, like how the 1st answer did…
Well, it has already been answered. Your parents will not be liable or affected. But you will be in a lot of trouble.
The right answer is the right answer, whether you get it from one person or 100. You have the right answer.
You are the one signing the master promissory note for the loan, it will be only in your name.
Are your parents worried about that?
And you need all the other information so you won’t have a ‘worst case scenario’.
People getting in trouble with their loans do so usually because they are not informed about all their options.
“I need more people to specifically answer my question, like how the 1st answer did…”
The same answer: No!
Your parents will not be required to pay your loan, but since the lender has their information, they could be contacted to locate you.
The Direct (Stafford) loans are in YOUR name only. Your parents will not be responsible for them.
But as noted above, defaulting on these loans isn’t a good idea.
I’m glad multiple people agree with the 1st answer!!! And yes, I’ve been researching the loans and what to do if you can’t pay and you guys gave good information on that too. I totally intend to work after graduation obviously, it’s just that it’s not guaranteed to find a job…
then perhaps you should work and save money for community colleges since you already feel that you may it be able to repay your debt
Also remember not all community colleges participate in the federal loan program
@sybbie719 I actually really wanted to do that, but the fast food/retail jobs were I live don’t usually give people over 20hrs a week. And I’ve met ppl who don’t get 10hrs a week, let alone consistent hours. I’ve never gotten consistent hours myself. The job market can be terrible here, so saving up for CC would probably take me a year or more. To pay for just a semester or 2, not counting books or other expenses.
I can’t even afford to have a used car or even pay for its gas, literally.
And I checked, the one I want accepts FAFSA, thanks.
@CheersandFiery, Take as few loans as you can. Your federal student loans are yours alone. You have a 6 month grace period after graduation before you have to begin repaying them. If you run into trouble – can’t find a job, lose your job, etc. – contact your lender right away. Do your best to keep on top of your payments to keep interest at a minimum.
If you transfer to a 4-year college, you can borrow $7500/year. While you’re in college, no loan payments will be due. As long as you don’t let your parents cosign parent loans for you, they won’t be responsible for paying them back. It’s the PLUS loans where parents end up paying (because those are parent loans).
There is absolutely no reason for you to ever default on loans. There are very flexible repayment terms available, and the payments are set to salary rather than to loan amount. Yes, you will take longer to repay the loans if you can’t afford the standard 10 year repayment amount … but you will eventually repay the loans (or they will be forgiven). Borrow as little as possible, repay it as quickly as possible, but know that if you can’t afford the payment, there are ways to reduce it.
Yes…I will really look into how the loans work even more and double and triple check things, so thanks again guys.