The school that I want to go to does not accept parent PLUS loan applications until after May 1. If for some reason my parents do not qualify and I have to take out a private loan, do I apply for the loan before I begin college? How likely is it that a private loan does not get approved? Because if I commit to a school and my parents don’t get the PLUS and I don’t get approved for a private loan, wouldn’t I be in trouble? Sorry I don’t know much about financial aid and I am a first generation college student.
Also, if I take out a private loan, when is that money given to me/the school?
@twoinanddone do most people qualify the the amount of loans they need? What happens if I apply to a loan over the summer and we don’t get approved, but I’ve already committed to a college? Sorry, I really am trying my best to research how all of this works!
@mommdc I plan to become a nurse practitioner. The school I really like did not give me the best financial aid package. All said and done, the net cost will be around 45K with all loans and scholarships included. My parents’ efc is only around 10k and that is really all they can pay. So the remaining cost I have is 35k or so. Would that be a ridiculous amount to take out in all loans? My parents are really pushing for me to go to the school of my choice, and they keep telling me to not worry about the cost of the loans as they’ll help me pay it later on. But I don’t know if it is feasible or even reasonable to take out that much money per year.
Also when you take out loans, do you take out the amount needed per year? Or the total amount needed over the four years?
If your parents cannot pass the PLUS credit check (which requires no bankruptcy but does not require showing sufficient income to repay the loan) they will probably not pass the credit check to cosign for a private loan either. Or if they do get a private loan it will be at even worse terms than PLUS.
@mommdc yes I applied to only direct entry BSN programs. I have another option that is significantly more affordable. It was just that my first choice school was a dream school. I was so happy when I got in because it was a major reach. So I feel terrible that I’ve been given this chance, but now I may have to give it up. I realize that it doesn’t really matter what school I choose because I’ll find a nursing job no matter what, and that the curriculum is pretty much the same everywhere. But I just can’t help feeling bad that I may give up my dream school.
@AroundHere My parents have prequalified for a private loan as I ran a prequalification tool. Do you think it is likely they’ll approve for the PLUS then?
Even if they can be qualified, if they borrow 35K per year and pay nothing while they’re paying toward tuition, they will owe 140,000 plus interest plus any tuition increases while you are in school.
They will be paying for your college for the next 20 years.
@twoinanddone but the parent plus application is not available until after May 1. So I’d have to make a decision before I know if their loan is approved.
@AroundHere I’m not trying to do this to them. If you read up a couple posts I wrote that they are pushing me to go because it was my first choice. They don’t want me to regret not going, but I also don’t want to regret how much it may ultimately cost. I don’t intend for them to pay for all the loans they’re going to take out for me. My hope is that once I start working, I am able to help them.
If your parents are not being financially prudent, sometimes it’s up to the kid think things through.
We haven’t even talked about the extra training and clinical work to become a nurse-practitioner. How will you pay for that if you are helping your parents pay for your initial degree?
The amount of loans you are considering is way too much versus the apparent amount of income to pay them back.
Start at a community college and transfer if you have to. You need something much more affordable than what you are talking about here.
Go to one of your affordable direct entry BSN schools.
If you start at this unaffordable school and then have to leave because it is getting harder and harder to get the loans, then you are giving up the benefits of a direct entry program.
Are you a CA resident? In another thread you said your parents’ income is $75k, so you intend to borrow half of their income every year for 4 years. Taking on that much debt is a horrible idea. They may not qualify all 4 years anyway. Then you’d have enormous debt and no degree.
You can take the ~$5500/year federal student loan and if you work summers you can raise another $3k. With your parents’ $10k contribution that gives you a budget of ~$18k. If there are no schools on your list within your budget you can take a gap year and apply to a new list of schools or start at a cc. But taking out $140k on a $75k income to attend school in Boston isn’t the choice I’d make.
You can’t apply to the PLUS loan until May 1, but you can figure out if they (or one of them) will qualify for Plus loans. There are really only 3 things that will disqualify them. 1) the applicant parent defaulted on a federal loan (his own student loan, a VA loan, tax payment); 2) has tte applicant filed bankruptcy in the past 5 years; the applicant is more than 90 days past due on a major debt (a debt above $2500).
You can contact a private lender and ask to put in the application now, but they won’t process the loan until you are confirmed to be attending the school. A private lender does not guarantee to give you the entire COA or the part you might need, and the borrower has to qualify with good credit and income to get any loan at all. A bank is not going to give a $30k loan to a person who only makes $30k per year and owes all of that to a mortgage, credit card balance, a car payment, etc… If you need $30k, you might only qualify for $10k. The Plus loan is all or nothing. If you qualify, they will give you the amount you need (COA-student aid= Plus loan amount).
I don’t think it is a good idea to take Plus loans for the entire tuition amount, or to plan to do it for 4 years. That is a LOT of money to be borrowing.
One of my kids is graduating and has a good job lined up. She had the option to take that job because her student loans are low. She needs to rent an apartment in a high cost city, buy a car, pay for insurance on the car and apartment, have money to live on until she gets her first paycheck. By keeping her borrowing low while in college, she has these options. If she were facing a $500 or $1000/mo loan payment, she probably would have been forced to move home and take whatever job she could locally.
“do most people qualify the the amount of loans they need?”
Some students have parents who can qualify for the loans, some do not. I know of a few cases of students who were able to borrow enough for two or three years of university, but then were not able to borrow any more and had to drop out. This leaves the student with no degree but with massive debt. This can be very bad.
“I have another option that is significantly more affordable. It was just that my first choice school was a dream school.”
Having a “dream school” is usually a bad idea. You need to go to a school that you can afford. Your dream should be to get into a school that you can afford and that will lead you to the career that you want.
“In another thread you said your parents’ income is $75k”
If this is your parent’s income, then DO NOT borrow $35k per year. This is way too much debt.
MOST students are constrained by economic reality with regard to what schools they can attend. You can be a nurse practitioner with a degree from any of a very wide range of schools. There are a lot of schools with very good nursing programs, which is fortunate because the US (and every other country in the world) needs a lot of very good nurses and very good nurse practitioners.
If you go to the school of your dreams, but all the time you will be thinking about the money you owe, it will not be the school of your dreams, it will become a nightmare.
Go for the option more affordable.
