<p>My daughter completed her first year of college this last spring. She enters in the fall very close to being a junior, so she's looking at about
2 - 2 1/2 years left of school (2 if she can do some online courses or something to cut that down). She is majoring in English Education, with plans to teach high school English when she graduates. Anyway, we were just able to pay for this freshman year by the skin of our teeth. My husband lost his job in April of 2004 and has yet to find another and, yes, he's looking 24/7; another professional caught by being 50 and a new manager coming in and cleaning house :(
We are paying our bills, keeping our credit up, but charging our credit cards to the hilt (before...we were paying them off each month). Daughter stayed in her college town (w/relatives) to continue working her 2, sometimes 3 jobs this summer, but that money will be enough to pay for sundries through the school year (gas money to get to jobs, personal items). I make $20,000/yr, we own a rental home in another city free and clear (value about $75,000)--it's this last item that's eating our FAFSA-lunch..."investment income". Schooling runs about $22,000/year. Her FAFSA was filed late; should be hearing any day; don't have an offer from her school as to what they can do yet after filing extenuating circumstances (Also, 3 of our 4 family members have had major surgery in the last 6 months; my husband has had 2 surgeries!).</p>
<p>My questions are these: I believe that she'll qualify for about $4500 in loans (unsub. Stafford) (they consider 1/2 year Soph., 1/2 year Jr.)...will we be able to qualify for anything with our low income (that we can defer)? I know rates are getting ready to jump; I'm trying to be prepared ahead of time. Will she be able to take out other loans to cover her half (we're paying half and so is she, whether it's from scholarships, etc., etc., on her part)? Will she be able to take out enough to cover part of our half? I guess bottom line is...can you take out loans to cover almost everything without the interest rate being prohibitive and with deferment?</p>
<p>If I had my way, I'd get a home equity loan on the rent home---husband doesn't want to--sees that as retirement income. Plus, we'll have a high school junior daughter in the fall as well, so more college looms.</p>
<p>I am almost in a state of panic when I think of the bills we're going to have to pay anyway, much less adding student loans to the mix....please help. This is all completely new to me (job loss, loans, etc.,)...she loves her school and is a top-notch student having to work too many hours during the school year to make ends meet.</p>
<p>Thank you for reading all the way through this.</p>
<p>Oh my goodness, you have had so much to deal with! I am so sorry, and will keep you in my thoughts and prayers. I am guessing that your DD goes to a state school, and that may make a difference in how they view investment income, whether they "gap" financial aid, what they will be willing to do for you having seen your extenuating circumstances. I certainly hope you will be able to find some mercy from them.</p>
<p>I wonder if there is any chance your D's teaching program could advise her about possible loan forgiveness programs. I know that some such federally funded programs forgive loans if the graduate teaches in a low-income area. You might have her contact the school when she gets time, or visit the career center or financial aid office to make sure she completes the necessary paperwork. Others may have some ideas about the deferring of loans for parents, not sure about that part. Here's a link for loan forgiveness:</p>
<p><a href="http://studentaid.ed.gov/PORTALSWebApp/students/english/cancelstaff.jsp?tab=repaying#teacher%5B/url%5D">http://studentaid.ed.gov/PORTALSWebApp/students/english/cancelstaff.jsp?tab=repaying#teacher</a></p>
<p>Take care!</p>
<p>Also don't forget there are special circumstances forms provided by schools, after they receive your fafsa number. There, you could describe the big drop in income, additional medical/insurance/other expenses, and detail your rental income. Remember all income on a rental is not profit- subtract prop taxes, upkeep, repairs, insurance, all the things that show on your tax form. Be prepared to document all claims.</p>
<p>Seeing these factors, a school can refigure your fafsa, maybe come up with a more favorable number.</p>
<p>Since you asked, I'd also suggest you re-think the rental home. A mortgage on it would be less interest than what you'll be paying on credit cards. You could really put yourself in a jam for years by using credit cards just to pay for gas to school. One wonders how many other day to day items are on credit card, too.</p>
<p>remember too, whatever you can provide for her education is a gift to her. Her education is so she can get a good paying career she likes. No law says you must put yourself into bankruptcy for her education. Let her borrow more, she'll value her education more, and if you come into money later, then give her the gift of paying on her loans.</p>
<p>I agree with the mortgage on the rental home. Because debt from credit cards is not considered by FAFSA, it will benefit you. Also the lower income that your H has earned this year will impact the FAFSA numbers.</p>
<p>We have higher than norm medical costs and finaid counselor at daughter's LAC (entering as frosh in Fall) suggested we send a letter next year when finaid info (FAFSA, Profile) goes to the school. She adivsed including such a letter with our other finaid documents, rather than asking for a reconsideration or appeal later. I gather that there is more leeway with allocating money on the front end.</p>
<p>With this in mind, I call right now and explain your concerns, including the plan to use the rental property for retirement income. I think the key is convey that you seek advice with helping your daughter stay in school and finance her education versus having to drop out for awhile. I know that you don't want to come across as asking directly for more money. Perhaps someone could help suggest some specific phrasing that you might use.</p>
<p>By this time, your daughter is a known entity and presumably the school would like to keep her. So, you have a common goal....</p>
<p>Good luck -- let us know how it works out.</p>
<p>A little off-topic (please forgive me, dear moderators) but we've gone through the same job-loss/age factor in our household. Mid-50's, over-educated (Ph.d. & M.S.) and considered too old/expensive.... I ended up joining the Transporation Security Administration three years ago and I believe TSA is starting to hire again. Pls send a private message if you need more info....</p>
<p>Are you also implying that your home is also free and clear like your rental?</p>
<p>Some comments on getting a loan.
Lending cos. using a comforming loan formula, lend on equity and on income. You may have alot of equity in your homes, but your income may not be able to support a large loan. The higher the loan to income ratio: the higher the interest rate. A nonforming loan will look at loan to value ratio first then look at the loan to income ratio second. The interest rate will be higher but the terms of the loan is sometimes more flexible. Having flexibility could save you $ even though interest is higher. </p>
<p>Your current situation is the lack of cash flow and not in assets (as revealed in the fafsa). Getting a home loan could improve the cash flow. </p>
<p>Short term, revolving debt, has improved your cash flow but could sink you because of the the variability of the interest. High credit card debt will also lower your FICO score and raise the interest rate on a subsequent home loan.Your minimum payments on credit card will soon increase to 4% on outstanding balance from 2%. <a href="http://credit.about.com/od/creditanddebitcards/a/051805.htm%5B/url%5D">http://credit.about.com/od/creditanddebitcards/a/051805.htm</a></p>
<p>Sometimes it is better to get a loan before you want it, or because you don't need the money; than not be able to get a loan when you really need the money. Remember the adage about, "banks [lenders] will lend when you when you don't want it but won't lend when you need it"</p>
<p>Suggest you contact several lenders, banks, advisors, and your school for more detailed explanations. Time is money.</p>
<p>Have you explored the possibilities of PLUS loans? The past three years, PLUS loans have been cheaper, have better terms, and more flexibility than home loans.</p>
<p>If you have a stafford (sub, unsub) or PLUS loan- Consolidate NOW. June 29 is too late to apply.</p>
<p>..to all who responded.</p>
<p>Our present home is not free and clear; in fact, it is an albatross around our proverbial necks. About 5 years ago we had major foundation problems due to an undetected hot water leak. We fought with our "good neighbor" insurance company for over almost 2 years, went to mediation, and received just enough to repair the foundation (no money at all for the 3/4 inch-wide cracks in almost every wall and ceiling, skewed door frames, ripped-up carpeting and flooring, etc., etc.) We had begun to repair it; at this point, we cannot continue (money) or sell it (condition).</p>
<p>I do know about the loan rates changing at the end of this month. I'm awaiting the financial aid committees decision as to the amount of aid they'll award DD...hope to hear by Monday or Tuesday so we can hop on the loans process.</p>
<p>I was not aware of the rates going up for outstanding balances on credit cards...need to tell DH so he'll see the seriousness of transferring part of our balances to a 0% card to buy us some time (hopefully, just until he gains employment) and paying off some with a home equity loan.</p>
<p>One other thing..DD is at a private Christian university. Pros and cons there - wonderful atmosphere, caring profs, etc., etc.....much love and understanding and fantastic academics-----not always the millions for scholarships that the larger, heavily-endowed state schools have.</p>
<p>For those of you who pray---please continue to do so. I so appreciate it.</p>