I know most people on CC are against student loans, but I truly will need them, since my family is so low-income. I’m not going to take out tons of money, and my mom will be willing to cosign. I was wondering which student loan provider is best.
I know of Sallie Mae, but I’ve read awful things about them. It did seem that most issues weren’t the fault of Sallie Mae, it was more that people were taking out unaffordable amounts. My guidance counselor recommended them, but my favorite teacher told me their interest rates are incredibly high.
PNC student loans offer an interest rate at 0.5%, but this requires automated payments.
I know my bank, Wells Fargo, also offers student and parent loans. Interest rates are about 3-4%.
You know that from some lenders, this debt cannot be discharged even if you die or become disabled, right? You could be sticking a parent or grandparent with YOUR debt that you may or may not be able to pay back, and that they may be burdened with for the rest of their lives. You are better off attending a school you can afford – if you can’t get into a college that meets need or where you can cover the cost from student loan amounts and what you can earn/pay from your family’s earnings savings, then you should commute from home, or attend a CC for two years and transfer. There is a really good reason people say you shouldn’t take on debt beyond your federal loan amounts. If you are really low income, you may get a Pell grant as well.
Most students don’t go to the schools talked about on CC. Most go someplace affordable to them, where they can live at home for at least part of their college years. You need to look at those choices.
I don’t know much about student loans, but that 0.50% interest rate seemed way too good. I just did a quick search and its actually 0.50% OFF. I’m not sure if you missed that or if it was just a typo, but that needs to be taken into account.
Yes, I know some debt can’t be discharged. I will get a get a Pell Grant, but even with a student loan, it won’t cover the costs of my CC with all expenses. Even if it did, I will need a student loan for the last two years. @intparent
So you will work part time during the school year and full time during the summers, right? Pell plus federal loans plus that won’t cover your CC costs?
A lot of students commute from home to their four year college after CC to save money, too. And sometimes students take gap years or semesters to just work and earn from the upcoming semesters.
First, use up all your eligibility for Federal Direct Student Loans. If you are low-income, these will be Subsidized Direct Student Loans, and otherwise they are unsubsidized.
Subsidized loans accrue no interest while you are in school, but both have the same interest rate once interest starts accruing. You qualify for both through the FAFSA, and the loan money is disbursed through your school. If you qualify for Pell, your loans should be subsidized.
A freshman can borrow $5500 max from the Federal Direct Student Loan program. Even if it seems complicated to get loans from two different places, if you need more than $5500, use up the federal loan eligibility first because these loans have the most options for income-based-repayment, forbearance, and other payment plans that keep you from going into default. It is an absolute disaster to your credit rating and finances to have a student loan in default.
How much do you need to borrow? Have you chosen a school and do you have a final financial aid package?
@intparent Yes, I will. I thought even if I worked, I would still have to take out student loans. I’m not considering CC since mine has an 85% graduation rate. I also don’t want to live in my neighborhood for two more years, it’s awful. I think it would have an impact on my studies, honestly.
@AroundHere Thanks for the info!
My top choice is Temple. I’m considering Catholic University of America, since they meet need for 50% of FA eligible students. I’m also considering La Salle. Waiting on acceptances from these schools.
I’ve been accepted into my state school (Montclair State University), and I would need about $7,497 per year. I’m truly going to try my best in college, so hopefully I’ll get scholarships.
I’m not really asking for advice on where to go, though. I’m just wondering which provider is best…unless none are good?
The best aid goes to freshmen. You can’t count on any extra scholarships once you start college. Your SAT scores (490 CR + 360 M) are too low for honors or department scholarships.
Do you need $7497 in addition to the federal student loan? It’s a really risky for low income families to take out personal loans for college. Too many things can go wrong. A lot of kids would like to go away to college, but their families can’t afford it. If your family has to take out personal loans, the schools on your list are too expensive. Students who are majoring in social work probably should graduate with as little debt as possible.
How much of a Pell grant will you get? In NYS, a full Pell grant (~$5k) and the federal student loan ($5500) would be enough to cover tuition, fees, and books at a 4-year SUNY. It would cover nearly 2 years of cc. What’s the tuition at your local cc?
On another thread you said your EFC is $4775 (I assume that’s from your mom’s income since your dad’s is $100k). If that’s accurate, I don’t think you’ll get much Pell. Your dad is supposed to pay half your tuition, but “might” pay more? How much will he pay?
If you can commute to Montclair and only have to take out the federal student loan, I’d do that unless a better option turns up.
@intparent Sorry, I meant an 85% drop-out rate. So, a 15% graduation rate.
@austinmshauri My EFC is 0 this year, I’ll get the full Pell Grant. He can probably afford most schools I’ve applied to, honestly, but I still need to talk to him. I know I won’t get extra scholarships at first. I’ll work my way up.
My CC is actually $4,218. The high numbers I saw were actually including room & board (off-campus). Like I said, I’m not considering since CC, since the graduation rate is terrible. I also don’t want to miss out on the first two years of college, I’ve been dreaming about it forever.
Please, everyone just tell me which loan companies are best…I’m not asking for new ideas.
All the private loans, through banks or Sallie Mae or Discovery, are about the same. You can look on the Consumer Financial Protection Bureau (cfpb.gov) and the website will have a comparison on each provider and the good, bad and ugly. The CFPB student loan department is really excellent for help with student loans.
Normally, the best order for loans would be Stafford ($3500 subsidized, $2000 unsubsidized), Perkins if offered, Parent Plus loans, and if that is denied, then the student would get another $4000. If one still needs money, THEN private loans. The interest rate might be a little higher on the Perkins or Parent Plus loans, but the terms are usually much more favorable than with private lenders.
@twoinanddone I just looked into Parent Plus Loans. It does say students may be eligible for them, if a parent is not. My GC was saying something similar to this, but he didn’t tell me where they would come from. Thanks!
Working your way up in scholarships isn’t how it usually works… if you aren’t offered a scholarship as a freshman, then you won’t likely get any later. Don’t put your family in a more precarious position just so you can have your dream of a four year school. Agree that you can get more in loans if your parents are denied for Parent Plus, but taking in a lot of debt is also risky for you. “Dreaming of it forever” can turn into a long term nightmare if you take on too much debt.
People think that because it’s all one FAFSA the aid will be the same everywhere. In fact, your choice of schools to apply to has a huge impact on the price you will pay.
PLUS Loans are not a great deal: there is a 4% origination fee (you owe a debt of $104 for every dollar you borrow) and the interest rate on your debt is 3.5% higher than the regular direct student loan program.
This is a meaningless statistic…and especially when it applies to,you. Remember, some kids may only have $2000 of financial need…and this gets met with a Direct Loan. Some might have $5000 of need…again…a direct loan.
It does NOT mean that 50% of students receive large amounts of financial aid to fully meet their need…it doesn’t!
In addition, CUA requires the CSS Profile,mand also the non-custodial parent Profile. So if you apply there, plan on having your non-custodial parent who earns $100,000 a year complete that form. And yes…this info IS used to calculate institutional need based aid.
You will only be getting about $1000 in Pell money…and then the $5500 Direct Loan. Can you live at home…and will $6500 cover your tuition costs at the community college? Do you have a job?
If your mom applies for a Parent Plus loan, and is denied this, you are eligible for an additional $4000 in Direct Loan money. You, the student, cannot take out a Parent Plus loan.
Most breathing parents qualify for a PLUS loan. I think they only look at collections actions on your credit report in the past year, not whether your not your income could actually support paying back the amount of loans you are taking.
^^There are 3 parts to the qualifying. 1. Current on debt, but that means no major delinquency like being in default on your mortgage for 90 days; 2. no defaults on government loans (like the parents’ own student loans). 3. No bankruptcy in the prior 3 years.