parent plus loan problems

Paying for College
1

<p>Let's start from the beginning. This past Fall Semester I took a medical leave of absence from New York University. I returned home during this period and attended weekly therapy sessions. In late December I was cleared, over the phone, by an NYU counselor to return. Due to the holidays, the person in charge of 'leaves of absences' didn't get to clear me for registration until last week (Jan. 4th). Around the same time, I received my financial aid package, and as usual need to take out a loan(s) to cover the gap. </p>

<p>My first year at NYU I took out a Discovery student loan because my mother was declined a Parent PLUS loan. Then my second year, my mother surprisingly got approved for a Parent PLUS loan. I also took out another Parent PLUS loan during the summer without any problems. This time around, however, my mother was declined for a Parent PLUS loan...and I'm just in shock. I have less than two weeks before the semester begins, and I'm just scramming around trying to figure this out. It really doesn't help that I'm the only one doing the work here...my mother doesn't do anything other than give me her information / sign documents. </p>

<p>Right now, my options are to appeal the credit decision (I'll call studentloans.gov to talk to them more about that) or to find an endorser for my mother. This is where my real question comes: who would be considered a valid endorser? By that I mean, what should the endorser's credit score be? I have a few family members lined up for this (although some of them tried to cosign for my loans years ago and were declined). Do you think it would be easier for them to get approved for a Parent PLUS loan? I know they tend to be rather generous. </p>

<p>Also, do you think my leave of absence could have somehow affected the decision? Could my loans possibly gone into repayment and affected my mother's credit score? IDK I definitely need to call up the Parent PLUS loan providers. </p>

<p>What other options do I have if I can't get this PLUS loan? I know going to school part-time would almost halve my cost of attending, but would my tuition scholarship be cut? Or would my loans go into repayment since I would not be full-time (I suppose I need to look into this). </p>

<p>I'm just so stressed out, and classes are about to start. :&lt;/p>

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<p>How much debt will you be in when you graduate?</p>

<p>Who cosigned your original Discovery loan? (I assume if your mom was declined for a Parent PLUS loan that year that she was also ineligible to cosign on that loan.)</p>

<p>Honestly, it sounds like you may be getting in over your head with all those loans!!</p>

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<p>My first year at NYU I took out a Discovery student loan* because my mother was declined a Parent PLUS loan. ***</p>

<p>oooh…and this for NYU…(what a shock!) </p>

<p>this was a major red flag that seemed to have been ignored. Once your mom was declined a Plus Loan (which are very lenient!), it was evident that your mom had credit issues. </p>

<p>Not sure how/why Discover approved the first loan with your mom as a co-signer, but with EACH loan she co-signed her credit score took a further hit. </p>

<p>Sounds like your mom was now declined by Plus because she has some more recent credit issues again.</p>

<p>How much have you borrowed so far? </p>

<p>Are you a junior or senior now? How much do you still have to borrow in order to graduate?</p>

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<p>My aunt cosigned my Discover loan, and currently I believe I owe 48,000 in student loans. When I graduate I would assume to be close to 100,000. Right now I’m a Junior.</p>

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<p>I just hope that I can somehow get this credit decision appealed because it would save me a lot of energy. I hope that they will take notice that we’ve borrowed in the past from them, but I highly doubt that would help. I know I’ll have to sit down with my mother and look at what could have possibly caused her to be declined.</p>

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<p>So, since you missed your first semester of your junior year, you have completed 4 semesters and have borrowed $50k so far? And, you’re on track to borrow $100k???<br>
Oh my! Where are the adults in this scenario?</p>

<p>What is your major and/or future career? How much do you think you’ll be earning when you graduate?</p>

<p>I think you need to stop this train wreck right now and transfer to a more affordable school.</p>

<p>What is your EFC? Are you a NY resident? If not, what state are you in?</p>

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<p>RockingJuice - I took out a parent plus loan for my daughter (at FSU) last fall as well. It was approved, no problem. Then I got a notice about a month or so ago that they had run another credit check and decided not to allow the Parent Plus loan for the spring because I have a tax lien. As I have no tax lien I was alarmed and immediately called FSU. I pulled my credit as well which clearly says “You have no tax liens.” under the negative accounts section. Anyway, when i called FSU they called the lender and worked it out with them to write the Spring Plus Loan. If they had been unable to do this then my daughter would have been able to take out an additional unsubsidized Stafford Loan instead and this would have been at a lower interest rate than the Parent PLUS loan anyway so it would have worked out even better. Mind you, I was given a verbal confirmation only by FSU that this was fixed and when my daughter’s aid disbursed this evening the Parent Loan did not so I will have to investigate it when financial aid opens in the morning. However, in your instance, you may qualify for additional Stafford loans if your PLUS loan continues to be denied. :)</p>

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<p>Whoa, is it really all that bad? I guess I’m just more of an idealist than a realist. I ended up going to New York University because I would still be required to take out similar amount of loans from the other schools (Berkeley and San Diego). I am a California resident, so I know it would have been a lot easier and more financially sound to have gone to school here. But the fact is my dreams lie elsewhere. </p>

<p>At first, I was going to school for premed but quickly found out that I wanted to do pursue a different career path. While in school at NYU, I was hired as the sole creative designer of out student newspaper. Then I got hired by the Student Health Center as a graphic design assistant. Working these jobs proved that I had a vast amount of talent in graphic designing, and I realized that I would like to go into Branding and Advertising. So I am now majoring in Art History (because it’s too late to transfer schools within NYU and major in Communications), and plan to go to grad school somewhere.</p>

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<p>@RockingJuice, I know you came to this forum thinking that your biggest problem is getting your next loan approved. </p>

<p>It’s not – your biggest problem is that you have already gotten deeply into debt and will have a hard time getting back out. What you don’t need is even more debt. When you are in a hole, put down the shovel and stop digging. You will not dig your way out by taking on even more debt to finish the degree.</p>

<p>Mom2CollegeKids may sound a bit harsh when she says “Where are the adults in this scenario?” but unfortunately she is right. $100,000 in debt for an undergraduate degree – any undergraduate degree – is far too much. That NYU’s financial aid office would encourage you to borrow that much is unconscionable. </p>

<p>If you do indeed figure out a way to take out a total of $100K in loans, your repayment will look like this:</p>

<p>Loan Calculator</p>

<pre><code>Loan Balance: $100,000.00
Adjusted Loan Balance: $100,000.00
Loan Interest Rate: 6.80%
Loan Fees: 0.00%
Loan Term: 10 years
Minimum Payment: $50.00
Total Years in College: 4 years
Average Debt per Year: $25,000.00

Monthly Loan Payment: $1,150.80
Number of Payments: 120

Cumulative Payments: $138,096.57
Total Interest Paid: $38,096.57
</code></pre>

<p>**Note: The monthly loan payment was calculated at 119 payments of $1,150.80 plus a final payment of $1,151.37.</p>

<p>It is estimated that you will need an annual salary of at least $138,096.00 to be able to afford to repay this loan. **</p>

<p>Check it out yourself:
[FinAid</a> | Calculators | Loan Calculator](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid)</p>

<p>There is no way you will be making that kind of money right out of school. Know what happens if you aren’t able to pay? The interest keeps mounting up and the total amount keeps growing. Student loans can’t be discharged through bankruptcy, so this will be a millstone around your neck for decades. While your friends are buying their first homes and starting families, you won’t be able to.</p>

<p>What can you do? For starters, look at taking next semester off and start searching for more affordable options. If you are a New York resident check into SUNY and CUNY.</p>

<p>RockingJuice, I am not saying these things to make your life right now more difficult. I really do feel the pain you are in. But sometimes things happen for a reason, and this may have happened to you to make you reconsider the course you are on.</p>

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<p>However, in your instance, you may qualify for additional Stafford loans if your PLUS loan continues to be denied.</p>

<p>Yes, this student would get an additional $4k if Plus is denied, however that doen’t sound like nearly enough for NYU.</p>

<p>Frankly, this student is already past the safe amounts of student loan debt and he’s only completed 2 years of college. </p>

<p>Rockingjuice…who is going to pay back those Plus Loans? Your mom? or you??</p>

<p>*So I am now majoring in Art History *</p>

<p>OMG…Unbelievable. </p>

<p>And, BTW…in Calif there are many, many ways to get the same education for a lot less money.</p>

<p>What is your EFC?</p>

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<p>@jannahickey: thank you for responding. your situation brought me some hope! I really hope I can figure this all out by the end of this week. For some reason I feel like the credit decision was based on an erroneous mark on my mother’s credit. But I can’t be too sure. I do know that my freshmen year, I received an additional (4,000?) in stafford loans, and I think I can receive close to (7,000?) if I can’t get this PLUS loan. I know that the stafford loan would have been split up by half for each semester, but since i didn’t attend last semester would they put the entire amount into this semester or just the half? I hope that’s not too confusing to follow.</p>

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<p>@megmo: thank you for your response. I think this is happening for the wrong reasons. I see that I would need to be making more than $100,000 a year, but I honestly feel like that wouldn’t be a problem. I plan to go to grad school, and if I’m correct, I wouldn’t need to pay my loans until I stopped attending school or my 10 years are up…whichever comes first.</p>

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<p>I believe that loans taken out in 2012 will no longer have a 6 mo deferal till repayment is due once you graduate.
Something to think about</p>

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<p>

</p>

<p>According to Salary.com, the median salary for a “graphic design specialist” is $47K.
That is for people who are at all levels of experience, from entry level to decades in the field.
[Average</a> Graphic Design Specialist Salary Information plus Job, Career Education & Unemployment Help](<a href=“http://www1.salary.com/Graphic-Design-Specialist-Salary.html]Average”>Graphic Design Specialist II Salary | Salary.com)</p>

<p>For what it’s worth, I own a small publishing business. We have four employees who are graphic artists. The last time I needed to fill one of those jobs I offered $15 an hour and got hundreds of applicants, most of whom were highly qualified.</p>

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<p>*I see that I would need to be making more than $100,000 a year, but I honestly feel like that wouldn’t be a problem. *</p>

<p>???</p>

<p>“honestly feel”??? Sorry, but as you’ve said, you’re an idealist, not a realist.</p>

<p>You’d need to be making about $140k per year right after graduation. And, that’s not taking into acct high cost of living in NYC where you’d need to be earning even more.</p>

<p>Even with a grad degree (and more debt from that?) there’s no way you’ll be earning anywhere close to 6 figures when you graduate. Your field of study does not pay well.</p>

<p>Even an engineering grad (which has about the highest salary after graduation) isn’t earning 6 figures at graduation or even soon after.</p>

<p>It looks like you’ve told your mom that YOU will be paying back those Plus Loans. </p>

<p>What is your EFC?</p>

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<p>This is a very scary thread. My son graduated in May and he has a job…a typical starting level job in his field paying a typical starting salary. He has only Federal Direct loans and even a couple hundred dollars a month in repayments is going to sting for a few years. I cannot fathom how this OP is planning on paying these loans back in an arts related field. OP if you manage to cobble this semester together I would highly recommend you take some time to investigate what starting salaries are going to be in whatever area you think your degree will take you. If it is graphic design even in NYC you will not make $100,000 for many, many years and then only if you are very good. Do your research this semester. As an adult it is painful to read this thread.</p>

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<p>" I plan to go to grad school, and if I’m correct, I wouldn’t need to pay my loans until I stopped attending school or my 10 years are up…whichever comes first."</p>

<p>The 10 years that were indicated in Megmo’s post is the length of the loan IF you started paying directly after undergrad. So $1,150 per month for 10 years. If you go to grad school the undergrad loans and grad loans (no subsidized grad loans) will balloon with interest and your payments would be dramatically higher. If you don’t pay they can go after your mother (for PLUS loans). You cannot get out of them in bankruptcy.</p>

<p>Have you been deferring interest on the current loans? If so you will have more than $100k the day you graduate undergrad. Do your Aunt and Mother understand their liability? This is a scary situation. Please reconsider your options. You won’t be making $100k+ right out of school.</p>

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<p>Graduate students are also Ineligible for subsidized loans.</p>

<p>You already owe $48,000, close to the median income in the US & still have a ways to go for an undergrad degree.</p>

<p>You need to work out a plan to pay it off and find an affordable school or you will never have the financial freedom you will need to be " idealistic".</p>

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<p>I really thank you all for the input, but at this point in my life I’m not frightened by these numbers. </p>

<p>I don’t plan on continuing as a graphic designer. I’m thinking more along the lines of becoming a creative director, and I know that attending NYU will benefit me greatly. New York is filled w/ talented people and I can’t see myself thriving elsewhere.</p>

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<p>Look, if you don’t want to listen to a bunch of parents telling you why this is a bad idea, at least take a few minutes to read the following story. It’s about an NYU alum with $100,000 in student debt.</p>

<p>[Another</a> Debt Crisis Is Brewing, This One in Student Loans - NYTimes.com](<a href=“Another Debt Crisis Is Brewing, This One in Student Loans - The New York Times”>Another Debt Crisis Is Brewing, This One in Student Loans - The New York Times)</p>