Is there a way ?

Paying for College
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<p>hello folks, I've lurked for a few months now.<br>
Thank you to all of you who share your knowledge and experiences! I have learned so much and hope to continue to broaden my knowledge to be able to assist my D as she continues her education. </p>

<p>my questions are :
1)is there any way possible to basically obtain a new private loan with lower interest rate and less restrictions to replace one which was signed for between and student( d) and cosigner? </p>

<p>2) if D is already at 20k in a private loan for education purposes, how will this affect her borrowing opportunities for any or all loans when continuing to pursue education at a private college the next few years?</p>

<p>The history is: D obtained loan b/c cosigner insisted over 2 yrs ago. Basically she was told by another party " if you want to move away for college, you must find a loan to be signed and that $ will have to last you until you are completed w/ school there" </p>

<p>Fast forward to now-- D is graduating w/ Bachelors next May and plans to pursue doctorate at a private college soon after. This will be another 100K for that 4 yr degree. Current loan is via American Student lending ( or similar name), at freaking 13.5 apr ! Yes seriously!! Allows for no grace period and d must be at least part time student to continue deferment status. (yes she panicked , made very poor financial decisions and did this under stress and influence from the cosigner) Amt borrowed was a total of 20k, of which an used auto was also purchased. Funds were gone in, well , in less than one semester. Needless to say, mom was stupid , need to stay out of her business , blah blah and d didn't listen to me. So here we are. D is now asking me for advise and input as she senses she's going to be more on her own financially as she continues this journey. I am not the cosigner nor would I ever have been part of getting her in that situation. </p>

<p>The direction i am going with these question are, of course, I'd love for her to not be in this situation and if co signer would fully assume this loan all would be grand , D would then have a clean slate in financial burden as she takes the journey for the continued ed --but that is only in a perfect world. also, I know for a fact other parent involved here will not go the road of a parent plus loan for her next year, and I probably will not either. I haven't eliminated the thought but i'll cross that bridge if asked. </p>

<p>Thus if anyone knows if there are any private lending facilities available to her so that the current loan could be replaced w/ less restriction and obviously a lesser APR, whether or not the current cosigner is on any new loan, please reply. </p>

<p>Thank you in advance for your replies.</p>

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<p>I don’t have a lot of loan advice. But I would STRONGLY suggest that your daughter apply to programs where her PhD will be fully funded through an assistantship or fellowship. To my understanding, that is how many PhD students fund their educations. If she receives full funding, she will not have to worry about loans.</p>

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<p>OK, to understand the situation, your wife (or ex-wife or mother of your D as the case may be) cosigned a loan which has a $20,000 balance at 13.5% interest. Your daughter now wants a loan of $100k to pursue a doctorate and you are not a cosigner on the current loan. You would like to know if your D can refinance the loan with a lower interest and also obtain a loan for the 100K. Would that be a correct summary?</p>

<p>First, I am sure there can be some refinance options, but no one is going to refinance a student without a job or a cosigner. I do not think it is going to happen. So either the other parent should try and get involved or your daughter needs to start working and paying of the loan. If your D defaults, the other cosigner is responsible, so that should be a motivation for the cosigner to be understanding.</p>

<p>As thumper1 says, it does not make sense to pay for a Ph.D. Also I do not know the institution or the subject area, but Ph.D.'s often go for more than 4 years especially in science and engineering. And the chances she will get a loan for 100K on her own signature is remote. If you take a parent plus loan, then you are responsible and you need to decide if you are willing to pay a 100K if your D is not able to pay you back or her earning potential is not very high. Ph.D’s in many areas e.g. history or literature may not have as many high paying jobs as someone in Finance.</p>

<p>Hence this may not be the advice you are looking for, but may be you need to sit with your D and candidly look at options including joining a university with assistanships, taking a job till the loan is paid off etc. I would not advice anyone to keep putting of loans with a 13.5 interest rate. Even if you refinance, the interest will accumulate over 4 years, and $20,000 could easily balloon into something bigger, even at 6% interest rate.</p>

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<p>Actually a grad student CAN take a Student Plus loan in their own name (as they are independent students). I believe my son “could” have gotten one for the full cost of attendance for his grad studies (he didn’t need one at all…but he “could” have gotten one…)…no cosigner.</p>

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<p>^^^^^ In that case the daughter will graduate with a Ph.D. and well over $120,000 in loans, on which she is the signer. Not a good way to start a career. Assuming that they will give her that amount with a cosigner.</p>

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<p>Believe me I am NOT advocating that this grad student take out Plus loans for her PhD program. Personally…I feel that if you can’t find full funding to pursue your PhD, you either have not looked in the right places or you are not a strong candidate for these programs.</p>

<p>I would NOT encourage my kids to have $120K in debt…I don’t encourage ANYONE to have that kind of debt. It’s not the way to start ones adult life. </p>

<p>So…to the OP…your daughter needs to look for and apply to programs that have full funding for her PhD. That would be my best suggestion.</p>

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<p>Thank you to all for your replies.<br>
To clarify the situation w/ my D.
Dad is to cosigner for the initial loan of 20K. I wasn’t involved in decisions as I was not needed at that time evidently. So here were are now, 20K over D’s head and still pursuing the continued ed. The private school will be chiropractic school. She is able to obtain financial thru the school of the common resources. At this point, altho I have encouraged heavily she has made little attempt to obtain “Free money” thru sources. I expect the Parent plus loan question will come up in a few months as she prepares to make the transition to the private college. I feel sure , but could be wrong, that dad is not going to be able to obtain any further borrowing as any cosigner, thus she will ask me. I doubt I will go down that road but its not determined yet.<br>
Its not going to hurt her to have to work a semester ,take off semester to try to earn pocket money etc to be able to get thru the next 4 years. I was always taught if you want it bad enough you’ll find a way to make it happen. Of course, we’d love for her to be able to breeze thru, not have to worry about finances, and all that… only in a perfect world. I can only make suggestions and offer advice when asked, if you know what I mean. </p>

<p>I have encouraged her to file independent on Tax returns next year so she will be in a better position for financial aid requirements. We’ll see how she handles it all.</p>

<p>Thank you again for your replies.</p>

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<p>also, the positive to this situation is D has a job waiting when she completes the Doctorate program, in 30 year established clinic. The owner has indicated he may assist w/ the cost of the degree but the details haven’t been discussed or agreements made at this time. I share this to say if D borrows the maximum amounts to get thru the program, I feel confident she’ll have a good income post degree to be able to comfortably pay her debt. The getting from now to then is the big hurdle :)</p>

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<p>Is this $20K your D’s only debt for undergrad? If so, she’s not in a horrible financial situation (yet)…although the interest rate does seem much higher than she would have received via Stafford loans. If she wants to work for a year she should pay down that high interest loan. If not, she should at least try to pay the interest accumulating on it monthly!</p>

<p>Since she’ll already have a bachelor’s degree, she’ll be considered independent for financial aid regardless of whether either parent can still consider her a dependent for tax purposes. She should absolutely file FAFSA as an independent student and consider taking the Stafford and GradPlus loans.</p>

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<p>Your daughter’s tax filing status has NOTHING TO DO with her status as independent or dependent for financial aid purposes…nothing.</p>

<p>If she already has her bachelors degree, she will be considered INDEPENDENT for financial aid purposes (unless her chiropractic school ASKS for parent info…worth checking…some med schools do ask for parent infor…I don’t know about chiropractic schools). </p>

<p>If your daughter is still an undergrad, she is probably still dependent for fiancial aid purposes.</p>

<p>$20K in loans for ALL of undergrad school is reasonable if those are the only loans she has. Is this the TOTAL of her loans?</p>

<p>If your daughter is going to grad school, SHE can take a Plus Loan her her own name. You don’t need to do so…in fact, I’m not sure parents can take Plus loans for their kids for grad school.</p>

<p>But bottom line…your DAUGHTER needs a plan for paying for her graduate studies. I don’t know what your plan was, but we agreed to fully fund undergrad school and our kids both understood that grad school was on THEIR dime. DS did a great job of getting some scholarship/assistantship/grant money. He was motivated to do so because any loans were going to be HIS loans, not ours. We flatly refused to cosign loans for grad school.</p>

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<p>Thanks again for the feedback!</p>