I wantz to bez a nurze. But I can has $$ from Prezident Catz?

October 23, 2008 8:22 AM

I have some student loan questions

Basic situation: After 11 years out of school, I've decided to go back to school for nursing. Before this process, I had $0.00 in debt, and close to $0.00 in assets. I decided at the last minute to get the ball rolling, so paid for 2 prereq classes on my credit card. My parents, who are supportive of this, loaned me the $1000 for the classes so I could pay off my credit card. I told them I'd get a loan to pay them back, but have yet to start that process.

I already have a bachelor's degree in music. No grad school (or classes) whatsoever. I'm doing really well in my classes so far, and committed to this path.

1) I have at least one more semester of prereqs to complete, and if I'm able to do them all in one semester (microbiology, chemistry, A+P II and maybe nutrition) I think it will be really tough for me to work, and I don't think enough to support myself. I do some photography work which pays really well when it's available but it isn't consistent. I'll be taking the prereqs in Boston (I'm moving there in December). Will I be able to take out student loans to support myself and pay for classes for the semester? I don't think I'll be enrolled in a program, just taking the classes at a community college there.

2)Is the credit crunch likely to affect student loans in general in the next 2 years? I know that's a big question but is there anything I can do to prepare for this situation?

3) Does my previous degree prevent me from getting federal student loans? I'm pretty sure it's totally unmeaningful but I never took out loans during my undergrad.

4) I'm 1/2 way through the semester on the classes that I'm taking now. And have to pay my parents back for the classes. Can I apply for a student loan still for this semester?

5) I keep hearing people say "college debt is the best kind of debt there is". Why is that? I always think debt is debt, and it all sucks. The only reason I'm comfortable doing it here is because there seems to be a well paying job at the other end of the tunnel.

6) Do you just take whatever loan is available or offered? Do you have rights of choosing who provides the loans or is that usually regulated by the school?

I'm sure I could find these questions answered somewhere on the web but the whole thing is incredibly confusing to me so if you can help me out I'd really appreciated it.

posted by sully75 to education (6 comments total)

I know nothing about the US student loan system but I can comment on "college debt is the best kind of debt there is": the loans are designed to be really friendly. The interest rate on mine is about 4% iirc, and I don't even have to start paying it back until I make over £16k or so a year.
posted by katrielalex at 8:36 AM on October 23, 2008

Contact the financial aid office at the community college; they can advise about eligibility for loans and which kinds. Who knows, grant aid may be available, and you never know unless you ask.
posted by libraryhead at 9:04 AM on October 23, 2008

While some of the big private lenders are getting out of and/or reducing their participation in the aid, there still should be Stafford Loans available (both subsidizied and un-subsidixed). You'll need to complete a FAFSA to determine eligibility and from there, you'll find out what's available to you.

As a general rule of thumb, private loans tend to have a higher interest rate than federal student loans whose rates are set each July 1.
posted by TravellingCari at 9:08 AM on October 23, 2008

The federal government dishes out loans for both undergrad programs and graduate programs, and the two are considered separate and distinct. I'm not sure where nursing falls, but I believe it would be considered a graduate program.

People who received federal undergraduate loans are still eligible for the federal graduate loans later on, so not having taken out any student loans at all shouldn't mean a thing in your eligibility --- in fact, you may find it works for your benefit if your pre-req courses are considered ugrad courses because then you could get ugrad loans and if your later nursing program is considered graduate, you'd qualify for the graduate loans.

How much you get will be dependent on your need, as well as whether the loans are subsidized or not. To receive federal aid, you will need to file a FAFSA form and depending on your school, you may need to eventually supply copies of your most recent tax forms.

Get the information for what you qualify for federal aid first before taking out private student loans. It's typically a shorter process to get private loans as the private loan companies don't need to communicate with the university until they disperse payment.

I'd also recommend sitting down with a financial aid counselor at the school you are attending to go over all the options with you.
posted by zizzle at 9:22 AM on October 23, 2008

One way of thinking about "good debt" is that it is the kind of debt you incur in order to invest in a productive asset or resource -- i.e., capital. You can think of education as an investment in increased future income. Just as businesses go into debt in order to grow (and become more profitable in the future), individuals can do the same thing with respect to their earning power through education.

Of course, this assumes that the investment in additional training really will result in increased income based on new skills, qualifications, etc.
posted by onshi at 10:03 AM on October 23, 2008

Uhh nice headline.

Student loan debt is good debt for several reasons, imho:

1) Flexible or extended repayment schedule - you can pay it up to a 25 year period of time, though 5 to 15 years is more typical.

2) Deferred payments - you don't pay back the loan while you're in school, and you have at least a 6 month grace period (sometimes more) after you graduate before you need to start paying back the loan. Also, the loan might be subsidized, which means it accrues no interest during deferred periods.

3) Forbearance/deferment : If you experience some sort of hardship, such as job loss or family changes, etc, there's provisions to temporarily suspend paying your loan for up to 3 years. Deferment is harder to get but it means the interest doesn't accrue on subsidized loans, whereas forbearance is easier to qualify for but you get no interest break.

4) It is almost impossible to get rid of (ie, if you file for bankruptcy you still have it) unless you become totally disabled or several other rare circumstances. While a drawback, this is also a selling point - the lender is likely to be flexible and work with you because they know you'll eventually have to pay it back no matter what.

5) Because you can't get rid of it except by actually paying it off, it qualifies for the best interest rates for any type of unsecured debt. And for some people you can get a better interest rate than you could even for a home loan.
posted by Happydaz at 10:41 AM on October 23, 2008