If parents get turned down for the parent plus loan because of adverse credit, I understand the student can take out an additional $4K in unsubsidized. But if that’s still not enough to cover the costs. Are there loans the student can take out with no cosignor (assume parents are the only available cosignors, but they have the credit issue).
Students need co-signers for loans. Lending institutions do not grant loans to folks without sufficient income or collateral. A cosigner will need to have these things, because you don’t.
Short answer…NO…you need a cosigner to get a loan outside of the federally funded student loan.
The answer is no.
Did you apply to any safeties? These are schools that you know will accept you AND you know FOR SURE that you’ll have all costs covered either thru assured grants, assured merit, small fed loans, and/or family funds?
Every student should apply to at least 2-3 safeties that he/she knows will be affordable.
I always scratch my head when I read threads like this. The student has parents with credit issues, yet thinks it’s ok to borrow a bunch for college. Find an affordable school that won’t cause you to possibly end up with adverse credit yourself.
we did apply to safeties, but the amount we’ll be required to pay is about the same at all schools he got into. And sorry if its puzzling to you that a student might need to take out a loan for school. People can have adverse credit for many reasons and just because someone is in a certain situation doesn’t mean their child will have the same exact experiences. I was looking for the answer to my question, not judgment. But thanks so much @mom2collegekids
As @mom2collegekids stated a true safety is a school the student/family can afford. If the four year school is going to be too expensive then the student should probably look at starting at a community college and saving for the last two years.
Do not assume you will be denied the parent PLUS loan. Just having a low credit score will not cause denial, but having filed bankruptcy in the last 5 years, being at least 3 months behind on a major debt (above $2500) or have defaulted on a federal loan.
Sometimes qualifying for the extra $4k is all the student needs, so wants the parent to be denied. If the family needs more, it’s difficult to be denied as there are few other options. It’s a really rough spot to be in. If the parent is denied all 4 years, the student will end up with an extra $20k in PLUS loans. That’s $20k over the $30k of direct loans.
I don’t disagree with @thumper or @mom2collegekids that starting college with the intention to borrow most of the costs is a dangerous plan. There is a chance you will hit a wall and just can’t borrow any more. There is the very big limitation of what you can do after graduation when the student might have to buy a car, rent an apartment, move to a new city --and all the costs involved.
I have two kids in school and didn’t have all 4 years planned out financially, but knew (and they knew) I wouldn’t take the PLUS loans. For one, it worked out fine and she just took the subsidized loans. For the other, things haven’t worked out so well. She’s had to take the maximum Stafford loans. Her post grad options are going to be limited (as will her starting salary be). She won’t be buying a car. She won’t be living in a nice apt.
Thank you @twoinanddone I appreciate your advice. After aid (including Stafford loans) and of course what we will be contributing, we will still be a little short so we are trying to explore the option of an additional loan, I’m not talking about looking to borrow $50K each year. And I hear what you’re saying and I agree that you have to keep in mind and weigh what will happen after graduation. I think what the student will be studying and doing with their degree has to be factored in. Thanks again.
I’d be careful factoring in what you think an 18-year-old will get a degree in. Kids change majors all the time. If the difference isn’t that much, maybe your child can get a job to make up the difference. Both of my kids work. My eldest has worked year round since before he started college.
My kid got an undergrad degree in engineering. That kid will NEVER work as an engineer. She on,y completed the major because she started it.
Don’t assume your kid will have a certain job when they graduate…it just might not happen.
My music major kid is working earning his income doing music.
Folks advised us not to let the music major major in…music. But look at that. He is working and making ends meet with his degree, and the engineering major is doing something different. Imagine that.
My son will be working this summer and during college and putting toward his education and I have zero doubt he would change his major, I guess you can laugh at me if you want, but I’m sure we all know our own kids and if he wasn’t so driven and certain on what he wants to do I’d feel the same way as you do. I guess what I mean by factoring in what they are studying I meant I’d be a little leary on taking out a student loan if he was going to be an art major (zero offense to any art majors) v. if he was going to major in cybersecurity.
If your child has not truly affordable options, it may make best sense to take a gap year, and earn some money to help toward costs while applying to a more affordable list. Think that through too.
My kid was totally committed to her major, and the only affordable route without extra debt was CC to state public U. She’s never worked a day outside her field, is paying down her loans, can afford to travel with friends for two weeks this summer, and is headed to a fully funded MFA program in the fall. She has enough saved in the bank to keep paying down her loans while in grad school, and they will be nearly gone by the time she graduates.
That’s exactly what parents said back in 2000 about E-commerce majors (before that tanked in 2001) and in 2006 about Finance (before the banking crisis of 2008) and Petroleum engineering before- well, hiring in the oil and gas industry hasn’t bounced back yet.
Every industry has its cycles. Every function has the years when you can’t hire enough (fill in the blanks) and then goes bust. My radiologist is in Mumbai (and I am not)- how scary is that? Every profession insists it can’t be outsourced until it can!
wow based on everyone’s theories no one should go to college. Thanks for everyone’s opinions. Sorry if things didn’t work out for your own kids. I will choose to believe in my own and move on. Thanks
Best of luck!
My engineer is graduating in engineering, working in engineering. Things really worked out for her. The big negative is that the job offer was in a city where she knows no one and that’s very scary for her. Luckily her boyfriend wants to move there too.
My other kid, with more in loans, is that art major. Really art history. Now a minor with a major in history. She still wants to be a Disney Princess when she grows up, and doesn’t care that it pays $12.50 per hour. She will have to have 6 roommates and eat ramen 3 times a day, no car, and no Starbucks.
Things worked out FINE for both of our kids. My point is…don’t take out loans in anticipation of some high paying job that might not materialize for your kid.
not sure where I said that I was doing that. I’m glad things worked out fine, that had to be stressful paying for college and then your child decides what they’d studied for 4 years isn’t what they want to do anymore, so I totally get and appreciate where you’re coming from.
Are you replying to me?
We sent our kids to college for higher education, not vocational training. We wanted them to learn, grow, ask questions, explore options, and become well educated.
We did not send either kid to college with the anticipation that they would pursue any specific major or career choice.
No stress at all.
Sorry I might have gotten you mixed with whoever said their child went to school for engineering and will not be an engineer and only went through with it because that’s what they started with. May have been wrong for me to assume that if you go to college as a engineering major that you’re doing so to be an engineer and not just to gain general knowledge. I will admit that I don’t know much about Engineering, but it seems very specific to me and thus why I made that assumption.
Half of my company’s strategic planning department studied engineering. Our top investor relations person is an engineer. When I worked in aerospace, most of the marketing and communications folks had engineering degrees even though they didn’t work as engineers.