<p>Hi everyone! I am posting for my son's friend who is a rising sophomore at a private university. For her freshmen year, her parents took out the PLUS loan to pay for the amount not covered by the subsidized and unsubsidized loans. They recently went online to do the same for her upcoming sophomore year, and were denied. I am not sure of the details as to why, the reason I heard was something about a credit dispute. Anyway, they went to Sallie Mae, Wells Fargo, etc. and it was all denied. She tried applying just herself, herself and her mom, herself and her dad, herself and her grandmother, all denied. She is devastated as she has already started a life at her current college (sorority, clubs, etc.) and does not want to leave. They tried calling financial aid at the school but they were not very helpful.</p>
<p>Does anyone know of any options she may have? Thanks in advance!</p>
<p>That is really sad. Do they have a personal relationship with someone at their local bank or credit union who can go to bat for them? Of course sadly the other side is that if they don’t qualify they shouldnt be taking out more loans, and facing it for 2 more years :(</p>
<p>There really aren’t any other options - and to be honest, if they’re borrowing the full cost of a private except Staffords, that’s a horrible financial aid package and an impossible debt load. That “dream school” is a nightmare, and she needs to find a more affordable college home.</p>
<p>I hope that many students and parents will see this thread–it could act as a cautionary tale about how depending on PLUS loans can backfire quickly. I know the regular posters have been warning many students and parents about the credit limit problems of PLUS loans, but it seems the warnings have often been dismissed and ignored.</p>
<p>For the OP, please bring the family the following sober news: there are no other options. As you can imagine, if the family did somehow miraculously find an obscure bank that would lend them them money for Year #2, you can already write the ending of this story… the student would then be even more engrossed in an educational experience she can not afford and for Year #3 and beyond it would be beyond impossible. It is probably beyond impossible already right now…</p>
<p>She can’t afford the college. There are no soft landings here. The “dream” of the private college experience has ended because the plan was never sustainable. She “bought” more college than she could afford. It is not entirely unlike families who bought more house than they could afford and several years later found themselves in foreclosure. </p>
<p>She needs to find a community college or a local state college where she can live at home or live somewhere very cheaply and attend a these more affordable colleges. Her new dream may have to be gaining a college degree at a place she can afford and to gain related job experiences to launch her into a career she loves and can thrive in. The dream can no longer be the “private college” <em>experience</em>. </p>
<p>Sorry, but there is no good news here. The best you can do is help this family adjust to their financial limits and make new plans that they can afford.</p>
<p>How much money are we talking here? It sounds like more than a couple thousand dollars. If the family was denied private loans from a variety of lenders, I think there is still one more option.</p>
<p>The student should transfer to a less expensive school. She is not out of options…but this is one she doesn’t WANT to do.</p>
<p>The student needs to ask the school for a year of absence. </p>
<p>During that year of absence, the parents need to settle the credit dispute. This will give them time to sort things sort things out and determine whether they really can afford to keep borrowing for the following 3 years. </p>
<p>If they get their money situation in order, the D can return.</p>
<p>If they aren’t able to do that, then during the next year, the D needs to figure out where she can attend school.</p>
<p>It does sound like the family borrowed more than they can afford.</p>
<p>I do hope others read this…it’s not unusual for families to get denied for loans for the following years.</p>
<p>Thank you everyone. It’s a very sad situation and I hate to be the bearer of bad news. I guess I was looking for some magic wand that could help this girl. Our local state schools (ones within a reasonable driving distance) are not so great so I hate to propose that as an option, but I guess you gotta do what you gotta do. Thanks again for the advice.</p>
<p>Because the parents were turned down for a PLUS, the student is eligible to borrow $4000 more in unsubsidized loan this year ($5000 more if she is junior status). That is the only “extra” aid she qualifies for, though. If that is all they need to make things work, she can contact the school to request the additional unsub due to parent PLUS loan denial. Otherwise, see above recommendations.</p>