Going back to school: how do I make it happen financially?

July 10, 2009 11:01 PM

I'm trying to go back to school. I have bad credit, some unpaid debt, and cannot afford any classes without help... Help!

After 5 years, I'm going back to school to finish my undergrad. My current career is turning into a bust and I'm terribly unhappy with it, so finishing my degree seems like a good way to open new and enjoyable opportunities. I have roughly a year left on the degree. In an ideal world, I would quit my job and go to school full-time since I cannot do both at the same time (my field of work requires a completely flexible schedule). I also cannot afford to take classes without any help, even a class at a time. My income covers my bills and that's about it. I have credit card debt along with a few other things (around $3000 worth) that I am slowly chipping away.

Basically, I need someone to explain to me a) whether it's a good idea to try and get loans that would not only cover my school expenses, but also living expenses (I would get a part-time job also), b) how I might make that happen as I have never dealt with any sort of loans before (plus the bad credit!), and c) why this seems so difficult and overwhelming.

I am, of course, going to talk to the financial aid department at my school, but I would love personal experiences as well as advice from those smarter with finances.

posted by itsacover to education (9 comments total)

You need to fill out the FAFSA and you need to do it now. You might have already missed the deadline for your school, so check on that. Also, if you do it and decide not to take out loans, you're not obligated to.
posted by sugarfish at 11:05 PM on July 10 [1 favorite has favorites]

The adults who I've seen go back to school did it in two ways:

1.) A start and stop style approach where they chipped away at a few semesters here and a few there, ultimately taking many years to complete their degree.

2.) A drastic lifestyle change where they sold everything they owned, moved into a cheap apartment, ditched their cable tv and other expenses and basically went into Ramen-noodle-mode where they just tore through school as quick as possible so they could get back to working full time.

Option two is the more drastic choice, but the one which seems to generate the best returns. That is to say, yeah, it sucks for a few years while you put everything and everyone on hold to go back to school, while struggling with a part time job or whatever - but it also allows you to get out the quickest and up your earning potential.

Either way, you've got to have money to start, and that's where either a FAFSA or a private loan will come in handy.

There are a lot of hoops to jump through out there, but I'm pretty confident that is help out there for you if you just start turning over rocks. The financial aid office of your local university is the best place to start. Don't take 'no' for an answer, eventually you'll find money for this.
posted by wfrgms at 11:26 PM on July 10

Many (most?) Universities have a "tuition remission" program if you get a job with them. It's often a token buck-a-credit hour for employees. Granted, it raises other problems (Do you want to quit your other job? Is your University even hiring? Will you be able to schedule the classes you want when you're available, etc.)

I just toss it out there for consideration.
posted by RavinDave at 12:07 AM on July 11

Your university can help. The federal government can help. Your state government might even help.

But you won't get any of that help until you file a FAFSA. It is easy to do.

Did you already gain readmission?
posted by twblalock at 1:24 AM on July 11

Guaranteed government loans, such as the Stafford loans I took out to go to graduate school, do not involve a credit check. Everyone who is enrolling in an eligible program is given Stafford loans. When I was going to grad school, you could borrow (IIRC) $18,500 per year, guaranteed regardless of your credit score.
posted by jayder at 8:44 AM on July 11

just to add: i have filled out the FAFSA, but it's still too soon to see what comes back. i am considered re-enrolled in the university, but have some things to nail down in regards to that (i'm active, but my status is a little strange and needs ironed out).

ravindave - i do want to quit my job. i would love to work for the university and have perused the listings, but anything within my necessary salary and qualifications requires - ironically - a BA. there is also the problem that some of the courses that i require have demanding class schedules (i.e. mon-thurs), which is part of why i would like to not work during my time back in school.

thanks, everyone, for your responses.
posted by itsacover at 9:34 AM on July 11

Shoot. On Preview, my comments became irrelevant!

I will just add, that I just finished my undergrad after being out of college for 8 years. The school financial aid office gave me grants and loans to cover tuition and living expenses. My first year I worked 30 hours a week and took a full course load. That was hard to manage, so my second year I quit my other job and got a new one working about 10 hours a week on campus. That paid just enough to cover my rent, and I otherwise tried to live as cheaply as possible. I managed to get out with only $9,000 in loans, and no credit card debt.
posted by apricot at 9:42 AM on July 11

Student loan debts (federal, not private) is the best debt you can have (if there is such a thing). The interest is much lower than any bank loan you might get.

I currently use federal loans to cover my living expenses for quarters when my graduate program falls short in funding (not uncommon in this economy) and can't provide me with a TA-ship. I have also used them in the past to turn high interest credit card debt into low interest student loan debt to be paid after graduation.

A couple things to consider:
-Will your degree/field earn you a high enough salary to be able to pay off those loans later? If you're getting a degree in Folk Literature or something, you won't have a guaranteed income to be able to make those student loan payments.

-Are you going into an area where student loans may be forgiven? If you teach preschool for a year, do some charitable work (within the qualifications), or join a program like AmeriCorps, Teach for America, etc., you can get those student loans either paid for you or forgiven.

These days it's almost the norm I would say to do what you're proposing with student loans. I'm not saying it's "right," but I will say that it works and if you go into the right field, you'll be able to pay them back. Just be careful to budget within those loans and to continue to live within your means. A $5000 check from the government is not a license to buck wild at Macy's (watched my college roommate do this several times over). Don't take more than you have to.
posted by moojoose at 12:46 PM on July 11

It makes a big difference whether you're going to a private school or not, but I'm assuming it's a public one because it just makes more sense financially for you.

If you haven't completed your degree, and you haven't used any or much financial aid in the past, then you should be able to receive a lot of financial aid. You'll probably not qualify for some grants because of your age, or if you're young enough and your parents make enough money. But the loans will most definitely be there.

And don't be afraid of loans. I picked up $25K in loans after 5 years of school and it isn't as bad as it seems, though that is partly because I locked the interest rates for most at a low rate (3.25%). Regardless of what the rate is (usually ranging from 3% to 7%), you're getting a darn good deal because it's a better rate than pretty much any other loan you can get out there, plus there's a lot of ways to defer payments if you ever run into financially difficult circumstances after you graduate. At some times it is actually beneficial to have loans at these rates because instead of paying the loans off quickly you can invest money into something that gives a larger return than your loan's interest rate. For example about 2-3 years ago before the whole financial meltdown, online savings accounts were pulling in 4-5% returns, larger than my 3.25% loan interest rate. Keeping this in mind there's no shame in paying off your education loans very slowly because if you put money into other investments like an IRA or 401k, chances are you can make a larger return on those than your loan's interest rate. Also, education loan payments should be tax deductable. Also, I don't think education loans count as bad credit if you meet the payment deadlines. Despite my $20k+ amount in loans I still have a credit rating in the high 700s.

Also, don't be afraid of part-time work. During my senior year I worked some 25-30 hours a week and still managed a 3.5+ GPA (though admittingly on near the minimum full-time class load and not a difficult major like engineering/biology/computer science) and an acceptable social life. If just comes down to planning and time management.

I think you should try to take as many loans as you need to. If they are subsidized federal loans, take them without a second thought. After applying for FAFSA and loans, you're going to given a maximum amount of loans that you can take out and you can just indicate how much you want to use.
posted by NeoLeo at 2:19 PM on July 11 [1 favorite has favorites]