<p>When the student doesn't have a credit history and the parent is unemployed, what kind of loans are available to the student? I know about the federal sponsored loans and their rates, etc. I am more interested to know about the college sponsored loans and private loans. Are college sponsored loans usually a better option than private loans? Although I am unemployed, my credit worthiness is still good, never missed a payment, etc. But I won't probably qualify to co sign since I have no income. So how does the student go about this?</p>
<p>Parent Plus loans are federal loans with minimal credit checks (they’re really just checking to make sure there aren’t recent reports of accounts 90 days overdue or bankruptcies). These are direct loans, so they come through the schools - is that what you mean by college-sponsored? They’re really government sponsored and have a fixed interest rate of 7.9%, with forgiveness upon the death of either parent or student. Payments start after the final (annual) disbursement but can be deferred while the student is still in college. But the parent is the borrower, not the student.</p>
<p>I don’t know of any other student loans that would be likely to be approved without a cosigner unless the student has a credit history but he could always put in an app with Discover or one of the other lenders and see what they say…some posters report success with this. If your child’s college has their own loan progam, and it’s really for students, that sounds like a good option to pursue if the terms are favorable.</p>
<p>As an aside, has the college been made aware of your employment status and have they agreed to adjust your EFC? If not, you may want to ask for professional judgement as it may translate into an increase in grant aid.</p>
<p>The only college-sponsored loans I’ve seen are for rather small amounts. I don’t think colleges really want to get into the major lending.</p>
<p>Parent Plus loans are rather easy to get if you have good credit. but, I have to ask, is your unemployment likely to be temporary? Do you expect to be making a strong income in the future? If not, why would you be pursuing this option?</p>
<p>If your son is thinking that he will be responsible for paying back these loans (in addition to the $30k in federal student loans), he may not understand how hard it is for newish grads to make large loan payments and still pay for all their own living expenses.</p>
<p>Is S eligible for parent PLUS loan even if I am unemployed? Again, my credit history is good-excellent.</p>
<p>sk8rmom,
</p>
<p>I was looking at the supplemental financial aid form at Georgia tech and they have an option called ‘Student loan from Georgia tech’. This is in addition to federal direct sub and un-sub loans and parent PLUS loan. The student has to indicate each item they want to be included in the aid package. We did not opt for parent PLUS or student loan for now. Should I go back and add those too?</p>
<p>mom2ck,
I am hoping go back to the workforce in the near future. So, I am not much worried about the repayment (we won’t take huge loans anyway. Just checking out options). I am more worried about the terms (eligibility, apr, etc) because of my current employment status.</p>
<p>My employment status is on the FAFSA application and our EFC is zero. We haven’t talked to the colleges yet. Should we do that before the actual financial aid package comes through? I did put some additional information in the area for ‘special circumstances’ and I hope the colleges read it.</p>
<p>No, if your EFC is already 0 then you probably won’t find professional judgement to be of any use. If your EFC was larger, based on pre-unemployment income, that would be one option to lower it.</p>