<p>I'm attending NYU in the fall as a freshman and 4 months ago when I recieved my FAFSA, all the costs were covered through scholarships, grants, and loans. Little did I know, my $16,600 PLUS loan required a parent credit check. I've just recently discovered this and my mom has had a bankruptcy and a foreclosure.</p>
<p>My question is, am I now expected to take out the remaining costs in private loans for the next 4 years? That means I'm going to have to find a cosigner for 4 different loans of huge amounts right? What are kids with parents who have bad credit supposed to do? It just seems awfully unfair that I'm scrounging to find the money to attend now. I already got over $6000 in stafford and perkins loans in MY name, so why cant I get the rest in my name? Its all so confusing...</p>
<p>And next year when I do my FAFSA and they give me the PLUS loan again, do I do this process all over again?? Any advice/help please?!</p>
<p>if your parents apply for and are denied the PLUS loan you can get an addition $4000 in UNsubsidized stafford loans.</p>
<p>there are NO other federal loans that a student can take out besides perkins/stafford.
Do you have work study money allotted? If not, as the FA office for some. It’s not paid to you upfront, but earned as you work (and paid to you).</p>
<p>If you end up with an extra 4K in stafford because of your parents being denied PLUS, that would put you over 10K for 1 year with remaining need of more than 10K. DO NOT take out 20K in loans for 1 year of school. You will need a cosigner for private loans, but DON’T do it. That is WAY too much to start out with</p>
<p>Edit: my son goes to NYU. They seem to put your EFC as a PLUS loan on the FA award sheet (this is our 3rd year thru this). You can feel free to pay that out of savings and not take a loan. Is that close to your EFC?? If it is, do your parents not have the cash???</p>
<p>PS. Shame on your parents for not telling you until now they don’t have the cash and/or they won’t qualify for a loan. I see you are from California, are there any state schools you can apply to if the money for NYU doesn’t work out?</p>
<p>My mom doesnt have the money at all to pay it on her own, we were both aware of this and thats why we were so thrilled that I got so much FA. But I’m the first going to college so both my mother and I don’t know anything about student loans and such. We both knew she had terrible credit, but didn’t know that the PLUS loan was for parents, we thought since FAFSA was aware that her income was extremely low that I was being given these loans, not her. So it all came as a shock when we found out the loans were for her.</p>
<p>I did get the extra $4000 in stafford loans, but that still leaves my balance at $15,600 for the 1st year. I have FWS eligibility but as you said, I dont get that upfront… so I’m counting on using those checks to save up for next years balance…</p>
<p>I’m not sure what other options I have then to get someone else to cosign for me for a private loan this year. And the next 3 years… I dont know I hope to scrounge all my money and work as much as possible this year to save up as well as apply for every scholarship possible. I was already guaranteed acceptance into UCI, UCSB, UCD, and a few other schools. But I got into NYU ED and want nothing more than to go there and will sacrifice anything to make it happen. I just dont understand why the PLUS loan was my only option, besides private loans…</p>
<p>Edit: Wouldn’t it be the same, starting out with a huge PLUS loan vs. the same amount in a private loan? Either way I have a cosigner and its the same amount i’ll have to pay back eventually… right?</p>
<p>FAFSA isn’t “aware” of anything. All that the FAFSA does is provide a number called an EFC, on which federal aid is based. Schools have a Cost of Attendance (COA). The COA-the EFC=your Need. However, not all schools meet your full Need. In fact, most do not promise to do so. What many schools do is offer the Parent PLUS loan as an option for meeting the difference between the aid that is offered and the cost to attend the school. The difference between PLUS and other aid is that the PLUS is not guaranteed, as you have unfortunately discovered.</p>
<p>I want to take this opportunity to remind students & parents who are reading this thread to RESEARCH THE AID THAT IS OFFERED!!! Had you researched the loans you were offered, you would have discovered what a PLUS is. Was this info in your award letter? I work at a state school & we include PLUS info with our award letter.</p>
<p>I do not want to put you down for not understanding, heyitzerin. I understand that you didn’t realize what everything meant. Now, however, you must decide what to do. Yes, your ONLY alternative is a private loan … unless you can persuade NYU to provide some more grant assistance. It is late in the game & NYU is not know for being generous with aid … but all they can do is say no … they might say yes … and you might get out of your ED contract. As disappointing as it may be, you may need to very seriously consider not attending. You are being asked to take on a very high debt load. My personal advice is not to do this. You say that mom’s income is “really low” — did you get a $5350 Pell grant? Or some Pell grant? If so, then the PLUS offered in your packaged clearly indicates a HUGE gap in your aid package … meaning that NYU should not be surprised if you ask for more aid and/or to back out of the deal.</p>
<p>Thank you both for all your assistance it really is helping. Unfortunately it is my fault for not researching my FA letter more than I did and this is why I’m in this position… I did recieve that exact amount for a Pell grant. In total I got about… $27,000 in grants/scholarships and with the stafford/perkins loans, in total I had about $37,000. So yeah the PLUS loan did make up for the difference.</p>
<p>I understand your warnings about putting myself in such high debt so early… but then again wouldn’t I have been in the same debt with the PLUS loan if I had gotten it? Same amount just a different source right?</p>
<p>It is probably too late to ask NYU for more money in grants… but as of next year… When I fill out my FAFSA again is there any way I can persuade them to give me more assistance? If they are aware of my issue this year, will they attempt to help me more next years since it’ll be my second year there?</p>
<p>The PLUS loan would be your MOM’S debt, not yours. Your only option at this point is a private loan, but you cannot be guaranteed that you will be approved. And the interest alone is going to be killer by the time you graduate. </p>
<p>I still think you should talk to NYU now. It’s really okay to write them a letter … explain that you did not understand about the PLUS loan, that your mom was turned down, and that you will have to attempt to borrow a private loan for a huge sum of money. Tell them how much you really, really want to attend NYU. It is definitely worth trying. </p>
<p>I can’t tell you what to do. However, I want you to go to finaid.org and use the loan calculators. Please see what the debt you plan to incur will end up actually costing you by the time your loans are paid back. You need to know what you are getting yourself into.</p>
<p>Please contact NYU and talk to them. Maybe there is something that can be done to help you.</p>
<p>Thank you very very much kelsmom, i really appreciate it. You’ve been a huge help. I’ve spoken to a few financial aid counselors about it, but I think I’ll call back to see if I have any other options.</p>
<p>The private loan I am currently considering to have a close family friend cosign with is the Wells Fargo Collegiate loan, which I wouldn’t have to pay back until 6 months after graduation, but I’m unsure about the interest… I will definitely check out that site and consider all you’ve said. Thank you.</p>
<p>CALL the NYU FA office, don’t write to them. You need info NOW, not in a week or so. </p>
<p>Your perkins is probably about 2400 (I think they told me that is the most they ever give), stafford is going to be 3500+2000+4000 so that is almost 12k in LOANS for 1 year. Please do not take out an additional 10K or more to go to NYU. It’s not worth it.</p>
<p>the interest on the unsubsidized stafford loans AND that private loan will be accruing while you are in school. you will be making HUGE payments for YEARS if you take on more than 20K in debt for 1 year of school</p>
<p>The issue is you got a lot of loans which the school calls financial aid. Your non Plus loans will go up each year, so will your Plus/private loans as tuition rises. You will be well over $100K in debt for just undergrad–about five times the national average.</p>
<p>It’s unlikely NYU will give you more grants now or in the future. They use most grant money to get freshmen in the door.</p>
<p>I know this is hard, but you and your parents need to sit down and decide if your going into this debt makes sense. It will impact your lifestyle for many, many years following college. Whether you can live in a safe neighborhood, buy a home later, drive a decent car. The payments would be very difficult even with the highest paying jobs out of college. If could limit your grad school and job options. And student loans don’t go away with bankruptcy, they will follow you until paid.</p>
<p>It sounds like you have other good choices that will not cause this kind of stress. NYC will always be there–for a transfer or summer term or a job after you graduate. Are you sure you want to put yourself in this position?</p>
<p>I know, I’m aware that I’m going to be incredibly in debt. And it’s a very very important thing to consider and keep in mind, but I rather have my degree from NYU and work myself to death paying off debts, than walk away and take the easier route, succumbing to a not-as-great education and knowing I never tried and have regrets.</p>
<p>I value all of your advice greatly and I have much to consider now… But I’ve had my mind set on NYU for 4+ years and worked hard to get accepted, I cant turn it down. I’m determined to make it work. It’s unfortunate my family doesnt make the money to help me go… but with all of this knowledge at least I know what I’m getting myself in to. Thank you all again you’ve been wonderful educators :]</p>
<p>I looked back at your old posts to ease my mind–hoping to see you were headed to Stern and that OK, it would be tough to repay that debt but if you got a top business job the first couple of years would be hard but then it would probably be a piece of cake.</p>
<p>But what I saw is that you’re in LSP, hoping to transfer to CAS as a journalism major. </p>
<p>As a concerned parent, I have to ask? How do you think you can pay that off as a journalist? The monthly payment on this debt would be crippling on the average journalist’s salary. Does work yourself to death mean a second job waiting tables at night to you? Please talk to some adults you know and trust who are knowledgeable about finance.</p>
<p>I truly admire your attitude but I’m afraid here that you don’t yet understand the long term financial consequences of taking on more than 5 times the national average at a time when those with average debt are having a hard time paying their loans off.</p>
<p>A mid tier UC is not an “easier route.” Those schools are the equal of NYU.</p>
<p>$100,000 at 8% will be a payment of $1200+ a month every month for 10 years. This is a horrendous amount of debt to start your life with and will severely limit your options for many years. Your debt will probably be well over $100k as the costs will increase each year and the loans will as well. You are unlikely to be able to the interest on your mostly unsubsidized loans as you go, which means the interest will be added to the debt and you will be paying interest on the interest causing the debt to balloon. </p>
<p>It is very unlikely NYU (who are renowned for poor financial aid) will increase your grants in the future. They are offering you a very high debt load now, when you are an incoming freshman (the group they are trying to attract), why would that change? They are, after all, already very aware of your family financial situation. </p>
<p>It is also a big burden to expect someone other than very close family to cosign such large loans for you. Your debt will affect their credit rating and any problems you may have in paying your monthly payments will negatively affect their credit rating. If you are unable to make the payments they will be responsible for your debt. If you can find someone willing to cosign for you they are a very good friend - perhaps you should consider whether you are being a good friend by asking this of them? In general cosigning a loan is a very bad idea - for the cosigner. I would never cosign for such large loans even for my own kids, whom I love dearly. Nor would they ask me to - my 20 year old daughter (a college student) recently did a consumer finance course and was quite horrified to learn what a cosigner risks and said she would never do it.</p>
<p>I do hope you will reconsider taking on such a debt. NYU may be your dream but you will be just as successful elsewhere without the massive debt hanging over you. Good luck.</p>
<p>Looking at the Wells Fargo loan site, it appears the Collegiate loan is a variable rate loan with a 15 year repayment term. The minimum monthly payment due, if you took $16K in loans over 4 years, would be $574 if the Prime Rate was 1% during that entire time! That is an unlikely scenario. It’s unclear if the 7.99% index (which yields an 11.24% APR) is the maximum, as it doesn’t specifically say there is a max rate, but that would require monthly payments of $1112 per month. The site also doesn’t mention any option to release the cosigner from the loan at any time during those 15 years, which would be very risky for your cosigner.</p>
<p>If you were to also take the maximum Stafford loans of $43,000 ($27K is the usual undergrad maximum, plus the $4K/year additional for the Plus refusal) and $10K in Perkins loans, you would owe approximately $115,000 after 4 years. This assumes that NYU’s cost does not increase at all and that they continue to offer you the same amount of financial aid - both unlikely assumptions. (No mention of how you will afford to live in NYC either!) The Stafford/Perkins debt would require at least $325 in monthly repayment under an income based or extended repayment schedule. So, your MINIMUM loan payments would likely end up being close to or over $1,000 per month for at least fifteen years. That would be impossible to sustain and still eat, pay rent, and have any sort of life. Does this make sense to you? </p>
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<p>Have you stopped to consider the regrets you WILL have for taking on this level of debt? Despite what you think now, there is no ONE “right” college for you. You can choose to make the most of every opportunity and choose to be happy at another school. You and your mom really have to look at the financial realities - you simply cannot afford 4 years at NYU and it’s a really bad idea on so many levels. What if your cosigner won’t agree to multiple years of loans and you can’t afford to go next year? This is not uncommon, especially if the cosigner isn’t completely aware of the debt load you’re taking on! After one year, you’re already $26,000 in debt…then what? Please take some time to read the stories at [Project</a> on Student Debt: Voices](<a href=“http://projectonstudentdebt.org/voices_list.php]Project”>http://projectonstudentdebt.org/voices_list.php)</p>
<p>You might be able to do 2 years, and graduate with an NYU degree, if you’re willing to start somewhere you can afford with no/low loans, do extremely well in your undergrad courses and transfer to NYU after 2 years. This would still require you to be very frugal and work and save as much as possible in the meantime.</p>
<p>Hmom5 is being kind in what she is trying to say. But I am going to say it - you would be an idiot to do this. NYU is an expensive school, not a school everyone could afford. How do you plan on paying back 100,000 in loans? I would love to have a McMasion (not really), but I can’t afford it and it’s not worth it to me. Same goes for you, as far as NYU is concerned.</p>
<p>I love my kids, but I wouldn’t co-sign a loan for them if they couldn’t pay it back. Another problem with co-signing a loan is it becomes your total debt outstanding, therefore it could effect your credit score. </p>
<p>It looks like you have other more affordable options. Going to the college(NYU) is not an entitlement. It is a privilege unfortunately you couldn’t afford right now. I would pursue those options now, rather than chasing after an impossible dream.</p>
<p>I am in a situation similar to heyitzerin’s. We were recently denied for a Parent PLUS loan (under my dad’s name) because of a bankruptcy which was discharged 4 years ago and a recent repossession. The bankruptcy was under both my parents’ name and the repossession was under only my dad’s name. We have not applied for the loan under my mom’s name.</p>
<p>So I have two questions:</p>
<ol>
<li><p>Should we apply for the PLUS loan under my mom’s name? (Pretty good credit since the bankruptcy, which was discharged a little over 4 years ago)</p></li>
<li><p>My grandma is willing to co-sign for the loan. However, she has absolutely NO credit history whatsoever (not bad credit/history, but NO credit/history). Like, she literally has never used/needed her credit. I don’t even think its ever been ran. So, does anyone think she will get approved as the co-signer if she has NO credit history?</p></li>
</ol>
<p>FYI: The plus loan amount was $24,500. If/when I apply under my mom’s name, I apply for $22,000, as this is all I need. Btw, I am attending Indiana University’s Kelley School of Business as an out-of-state student.</p>
<p>I guess I could/should ask this question in this thread as well:</p>
<p>Should I go to DePaul University (Chicago) (and pay $35,000 over 3 years after financial aid) or go to Indiana University (Bloomington) (and pay $105,000 over 3 years after financial aid)? I am a Finance/Accounting major.</p>
<p>FYI: the numbers above have been derrived from three assumptions: 1. I graduate in 3 years, 2. I defer all my loans till 6 months after graduating, 3. All interest on all loans has accured and capitalized over those 3.5 years of deferremnt.</p>
<p>I’d like to add my opinion to some of the parents here.</p>
<p>As an FYI, I was accepted to a top school, one that I REALLY wanted to attend. Alas, even though I qualified for need-based assistance, the FA package of grants, scholarships, and loans for both myself and my parents would have put me in a minimum of 60,000 dollars in debt by graduation.</p>
<p>After much soul-searching, I decided I could not do it. Even though I knew the school was a good fit (and the prestige was so enticing,) I realized that I was tying a noose around my neck. My future would not be mine; I would be working to pay off a huge debt. I chose instead to stay instate at a state honors program and I will graduate with ZERO debt.</p>
<p>In four years, I will be free to choose my path again - grad school? work? travel perhaps? I won’t be forced to find a job, any job, to pay the bills. Remember, the loans are due and the payment is calculated on what you owe, not how much you make. No job yet? Too bad, you still have to pay.</p>
<p>Think about what that means to you on a daily basis and then consider that you don’t have to go to NYU to be successful. You WILL get a comparable education at many other schools. </p>
<p>Get it out of your head that the only place for you is NYU and you can move on and make a better decision.</p>
<p>$35,000 debt - at 8% interest =repayments of $424 a month every month for 10 years (if the loans are unsub Stafford loans at 6.8% then @$402 a month). Quite a lot when you factor in that you may want a life - home, vacations, family.</p>
<p>$105,000 debt - at 8% interest=repayments of **$1274 a month every month for 10 years **. Just horrible.</p>
<p>I also think a lot of students overestimate their early earning potential. Very few grads start out at $75000. The reality is that many jobs start at 30,000, if you’re lucky. And engineers, who may start at the higher end of the scale, often progress slowly up the ladder and top out at 125,000 or so after two decades of work.</p>
<p>Also, no one is taking into account the current poor economy that may or may not improve by the time we graduate in 2013. Who knows if jobs will be extremely competitive? A lot of my sister’s friends who graduated in '08 are either still job hunting or working at much lower paying jobs than they envisioned.</p>
<p>We are deluded into believing that a BA is a ticket to a high paying job. It’s not true.</p>