Parents both unemployed

Paying for College
1

<p>My husband has been unemployed since August 2008, and I lost my job in March. I edited our FAFSA based on this - still get an EFC of $10K+ which I don't understand at all. </p>

<p>I also asked for reconsideration of the financial aid packages from the colleges my daughter has been accepted to, but they all say I have to be unemployed for at least 10 weeks (which will be mid-June roughly) before they will reconsider the financial aid package.</p>

<p>Lastly, I know my daughter will need loans before she starts in September - what if I'm still not employed by then? Will she even be able to get a loan? I'm assuming a parent would have to co-sign, and if the parent is unemployed, well, would the bank even consider giving a loan under those circumstances?.</p>

<p>Any insights on this situation are appreciated.</p>

2

<p>If you and/or he are still unemployed by the June deadline and the college does not have a workable solution for you, your student might want to take a gap year. That way, the impact of the unemployment will show on the FAFSA and other forms next year. Your student could also work and make some money, and maybe take some classes at a local state school to keep here academics up and also possibly shorten her stay at the more expensive school.</p>

<p>THere are probably loans available. Many schools dish them out to any kid asking. The big question is whether this is wise move for you to make, given the situation. We were ever so gung ho with our first child and moved our financial worlds to give him his first choice college regardless of cost. Since then, we have had to reexamine our priorities. It puts things in perspective when we are paying the PLUS loans still from his college years and will be until 2017. Health, the job market, family crises, family needs, the financial situation have all changed since then. We would be in a lot better shape and have more options if son had gone to a state school or to the full ride choice he had instead of our paying full freight for an expensive private school.</p>

<p>There are some provisions for displaced workers which may be the reason for that mid June wait. Your EFC was calculated from your 2009 earnings and finances as of the date you completed the FAFSA. Without those new displaced worker provisions and the professional judgment of the financial aid officer, that you are now unemployed does not change the picture until next year.</p>

3

<p>I’m sorry to hear of your difficulty and hope the school(s) repackage her in a timely manner! I’m sure it’s very stressful to be in limbo! As far as your questions…a bank loan may not be possible without other income/collateral. But Stafford loans are available to your D ($5500 freshman max, up to $3500 can be interest-subsidized while the student is in school) and you may still qualify for Parent Plus loans, which are federal and have a very minimal credit check to ensure there is no history of bankruptcy or serious (90+ day) delinquencies. You may find that the rates on these loans are as attractive as private loans and the rates are fixed (for 10/11 I think it’s 4.5 for Stafford subsidized, 6.8 for Stafford unsub, 8.5 for Plus). Private student loans are typically variable rates and are currently running in excess of 9% unless the bank gives concessions for the cosigners credit score or other factors. You might also consider that private loans are not eligible for federal repayment options or forgiveness (in the case of death, severe disability, or special employment programs such as public service).</p>

4

<p>Until your family’s finances get back on track, your D may have to either go to a local state school or CC where she can commute to.</p>

<p>She can borrow $5500 without your signature. Those amounts increase for soph and jr/sr years. So, she would end up borrowing about $30k for her 4 years - that is MOST an undergrad should borrow. Do not co-sign loans that would make her owe a lot more after she graduates. She won’t be happy if her adult life is ruined because she is drowning in big loan payments.</p>

<p>Plus loans for parents are an option, but probably not the best option for you either… I imagine that since your H has been unemployed for almost 2 years, your financial situation has worsened over that time and the last thing you need is to take on more loans. </p>

<p>I imagine that once everyone is re-employed again, you’ll have your own family needs
to “catch up on,” and you don’t need the added burden of paying back plus loans.</p>

<p>Did your D apply to any local state schools?</p>

<p>What school is she planning on attending? Keep in mind that if it’s a FAFSA only school, they may not give her much more even after June. </p>

<p>I know that you’re going to feel like you’re breaking your D’s heart if she can’t go to the school that she planned on attending, but unfortunately her adult life will be much worse if she takes on huge debt for college. </p>

<p>What is her intended career? How much do you expect that she’ll be earning upon graduation? What if her job is not near home and she’ll have rent and other expenses to pay for? (many assume that they can live at home for free while paying back big student loans, but sometimes jobs are too far away, or living at home is too difficult after having college freedoms for 4 years.)</p>

<p>another thought…if your D plans on becoming a teacher, she might consider a TEACH grant.</p>

5

<p>* my daughter has been going to a **low quality public high school **since Nov. of her junior year…She’s got a 3.0 GPA but did well on her SATs: 630V, 550M, 570W, </p>

<p>…daughter has always had situation of** not applying herself when it comes to classwork, but always pulls it out on the tests.** Problem is, of course, that grades don’t come from 100% tests, but homework, assignments, etc. In some cases, she’s ranged from A to D in the same class over the course of one school year – thus the lower than should be GPA.</p>

<p>She’s interested in the “quirky” colleges (no surprise there), so we’re looking at Bennington, Marlboro, Hampshire, Clark, Eckerd and New College of Florida…She’s been in college prep classes throughout high school, but no AP or honors at all. *</p>

<p>OK…from your post on another thread, I have a serious concern…especially when it comes to borrowing money for a child like this.</p>

<p>Many, many kids who have not developed good study/homework habits and believe that they can “pull it out with tests,” so they don’t apply themselves in the classroom end up doing very poorly in college. I must warn you that borrowing money for a situation like this is VERY risky. She could end up doing poorly and then needing to leave…but with big debt to repay. </p>

<p>College is a LOT harder than high school, and it’s worse for your D since she hasn’t been in honors/AP classes, so she’s used to easier classes. She will be in for a shocking surprise in college.</p>

<p>There are many threads on CC about students who never had to work hard in high school doing very poorly in college because of lack of study habits, poor homework habits, etc. </p>

<p>I would NOT get involved in any debt situations until my child could prove that she will apply herself in a local college.</p>

6

<p>My daughter has attempted to “prove herself” during this last year in high school - and did get straight As for the last two terms. That’s as good as you can get, of course. I’d hate to tell her that she has to “prove herself” even more at a CC.</p>

7

<p>Well, that’s good news that she’s gotten straight A’s this year. :)</p>

<p>But, that doesn’t change the financing situation.<br>
What school is your daughter planning on attending? Does it promise to meet 100% of need without big loans? If not, how will it get paid?</p>

<p>What is her likely major and future career? All of that needs to be taken into account when considering debt. Stafford/Perkins loans will put your D in debt for over $30k by the time she graduates. Not all of that will be subsidized, so the loan amount will grow while she’s in college. That’s a lot of debt right there. </p>

<p>If she ONLY borrows that amount ($30k total), then her monthly payment will be about $350 per month for 10 LONG years. That’s a lot. That is like making an extra car payment (in addition to any REAL car payment and all living expenses) for 10 long years. To borrow more than that will surely cause her more disappointment in the long run then cutting debt by going less expensive for the first 2 years.</p>

<p>What state are you in? Florida? Does she qualify for Bright Futures?</p>

8

<p>The national (and international) economy is lousy. Lots of families are in situations like yours, and even those parents who are not in jobs that are threatened are feeling the bite. If your daughter has to shift her educational goals in light of present circumstances, she will be in good company. She knows that both of her parents are out of work, and that there just is no spare change right now. If she ends up at a local commuter school, it won’t be a matter of “proving herself” academically, but rather one of accepting the financial realities of her life.</p>

<p>Wishing you all the best.</p>

9

<p>If your daughter has to shift her educational goals in light of present circumstances, she will be in good company. She knows that both of her parents are out of work, and that there just is no spare change right now. If she ends up at a local commuter school, it won’t be a matter of “proving herself” academically, but rather one of accepting the financial realities of her life.</p>

<p>Very good advice! </p>

<p>I can understand that no parent wants their child to feel the negative affects from a family’s financial difficulties that occurred at the time of college matriculation. However, it is what it is. If the school doesn’t somehow come thru with some miracle aid, then it’s very likely that the school won’t be affordable. </p>

<p>Whatever disappointment she feels now will be nothing compared to any frustration she has between the age of 23 -33 when she’s drowning in debt. </p>

<p>*Take a look at the thread that Pierre0913 started “Great Article about Student Debt!” You don’t want to one of those featured in such articles holding a bag of $80K in student debt. There are kids in that situation. *</p>

<p><a href=“http://talk.collegeconfidential.com/parents-forum/934214-great-article-about-student-loan-debt.html?highlight=student+debt[/url]”>http://talk.collegeconfidential.com/parents-forum/934214-great-article-about-student-loan-debt.html?highlight=student+debt&lt;/a&gt;&lt;/p&gt;