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My New Strategy: Advice on a relatively small student loan?
January 23, 2014 7:13 AM   Subscribe

I have always paid for my school out of pocket. I need to pay for about $3,000 in school fees so I can try and finish my BA. I did the FAFSA, but my school has me on financial aid cancellation because I haven’t made ‘significant progress’ and completed my degree in the time allotted. How do I find a good, reasonable loan so I can get to the finish line and not have much debt?

(For background on my situation refer to my other AskMeFi’s for more info. Specifically this one )
I am taking two classes this semester and trying to wrap this crap up and move on with my life. Had my first class last night and while it was extremely difficult for me to overcome fear and anxiety and lack of confidence and sit in that classroom I DID IT. Now I just have to make it through the rest of the semester without everything else in life overwhelming me and preventing success like it has before. (Read: work, family, depression, trying to pay for said classes.)
So basically, I need money to pay for these classes. It will be about $3k. School is blocking my FAFSA, even though according to the FAFSA e-mail I received after completing it said I was eligible for around $12,500. School’s financial aid office won’t budge for me because I haven’t made ‘significant progress’. Which really angers me because I have always kept trying. True, I failed a couple classes because I was too hardheaded to not take fewer classes, but that is an entirely different story. I paid my bills every semester and kept going. I’ve never had a student loan before. I currently have a small car loan, but that is the extent of my experience with these things. Where should I be looking for a small loan to pay this semester? I won’t lie, the worry of paying the bills has been a huge reason I have failed classes in the past. I get halfway through the semester and things start to fall apart. I can’t let that happen again. I have some cash, but after the advice I’ve received from my other AskMeFi’s and other sources it seems like a small loan is the way to go. Help me figure out where I should be looking for this kind of loan. What sort of rate should I be looking for? Guidance please?

I really need encouragement to help me through the next six months. If I can get out of here with a degree in hand I will feel so much better about myself and my future. I am actually a very intelligent young woman. I’m resourceful, witty and tenacious. I have talent and I want to use it to give back, but I can’t do that if things remain the way they are. I want to be confident in my skills again, and that means leaping the last hurdle and finishing the race even if the crowd went home.

I humbly ask for your wisdom MetaFilter.
posted by Driven to Education (18 answers total)
 
First, breathe. You're doing a hard thing and this can be super stressful, so make sure to take care of yourself emotionally. Notice your feelings, let them happen, and find the place in you that can do what you need to do. You have accomplished a lot already. This is just one thing. It's not about you and it's not a time for shame.

$3,000 is not a lot of money for a school loan. The Federal Dept. of Education should have some answers for you on getting a private loan, and really your school's office of financial aid may be able to help you there. But the monthly payment on $3,000, if that's your only student loan payment, is going to be pretty manageable if you have really any kind of a job. The problem with a private loan is that there often isn't much in the way of deferment / income-based-repayment / forgiveness, so you will want to get clear of the thing in some kind of short order, but it's really not the end of the world.

What isn't clear to me is whether this $3,000 is IT for you or not. At the end of this term will you have qualified for your degree? If not, will you have made sufficient progress at the end of the term to qualify again for financial aid? (If the latter, get your answers in writing from the financial aid office.)
posted by gauche at 7:34 AM on January 23


I was in the same situation a couple times over the past 3 years. Your school gets to decide if you get financial aid, even if your FAFSA says you need it. I had my financial aid denied for the same reason twice. The first time I was able to appeal the school's decision and financial aid was reinstated for that semester. The second time my appeal was denied and that's when the fun started. When your school denies your aid, you can't even get a student loan. No money for you. Your financial aid dept can tell you how many classes you have to successfully complete in order to be eligible.
So first, file an appeal with your financial aid department. Write an essay explaining what happened, why it happened, and how you're going to prevent it from happening again. Share all the details you can-have no shame!
You will have to get a personal loan, because you won't be eligible for even a private student loan as long as your school has the hold on your aid. It's not that much money and I'd say if you think you can make the payments, do it. You can do this! Life happens to all of us and we just have to learn from our mistakes and move on. Don't feel bad about that (I ended up getting some therapy to help with that part), school can really help build your confidence. A random internet stranger has faith in you!
posted by notaninja at 7:48 AM on January 23


To gauche:

I am trying to get a class I withdrew from cleared up with the professor. If that goes through ok, I will have my degree.

If not, I will probably apply for credit for prior learning. Because basically the class that I withdrew from is the EXACT SAME THING I do everyday at my current full time job. I couldn't retake that class I withdrew from because it is in the afternoon and my full time job is a 45 min drive from school.

I'm trying to jump one hurdle at a time...
posted by Driven at 7:50 AM on January 23


You are probably not eligible for most private student loans either. Sorry. Most require that you are attending school between half and full time, and depending on the institution 2 classes likely won't be enough. Given that, I strongly encourage you to talk to all the local credit unions and find out which ones offer private student loans. They're the most likely to work with you to make it possible. There is very likely a credit union that's associated with your school and would be very easy to join. Most credit unions have *some way* of getting you in, even if you think you don't qualify. So don't hesitate to call and talk to them about their student loans, even if you think you can't get in.
posted by stoneweaver at 8:02 AM on January 23


For $3000 one time I might be tempted to take up one of the many credit card companies offering 12 -18 months no interest, credit card that final tuition payment, and pay it off as quickly as possible. Even if you end up paying some interest it's going to be a rounding error in the big picture of getting the degree and getting on with life.
posted by COD at 8:07 AM on January 23 [4 favorites]


I'm gonna agree with COD here. Maybe carefully look at these Chase cards
posted by czytm at 8:15 AM on January 23


Yea, I'd go credit card or personal line of credit / personal loan from the bank. As a bonus, you won't have to deal with your loan getting sold 867 times to different companies that may or may not lose your payments.
posted by WeekendJen at 8:33 AM on January 23


If anyone is willing to work with me a little more on narrowing down options with credit unions/ personal loans or credit cards please please please memail me. I'm kinda lost about all of this. :(
posted by Driven at 8:44 AM on January 23


Yeah, I'd pay with a credit card. Probably a new one with a promotional APR period and either cash back or rewards. Most schools accept credit cards, so it shouldn't have to be a cash advance.
posted by melissasaurus at 8:44 AM on January 23


Also, does the school have a payment plan you can use? I've attended 3 different universities and they all had a monthly payment plan option.
posted by melissasaurus at 8:45 AM on January 23 [1 favorite]


Yes, look at the bursar 's office website or call them to see if they offer a payment plan. They sometimes have them for these medium sized amounts.
posted by bluefly at 8:50 AM on January 23


You are over thinking this Driven. Hit one of the sites that ranks / reviews credit cards, pick one that meets your needs, and fill out the online app. If you have decent credit you'll probably have $3000 of credit in less time than it took you to type the question. Just do it now and be done with it. Just make sure you read the T&C's and understand the interest free time frame and what happens at the end of it.

Also - make sure you can pay tuition with a credit card too.
posted by COD at 8:53 AM on January 23


I don't know much about loans, but if you're going with a credit card loan, ABSOLUTELY make sure you can pay off 100% of the loan WELL within the no-interest time frame.

If I decided I needed a loan, I would go visit my credit union and a couple others and ask them what they offer for short-term loans and rates.
posted by aniola at 9:36 AM on January 23


I was going to suggest credit card. This doesn't need to be an ordeal - just go to bankrate.com, find one that has a 0% APR for 12-18 months, bonus if you can get something with cash back, and apply. You would, ideally, be in a position to pay off the debt over the 12-18 months but if not, you can try to get another credit card with a 0% APR on balance transfers. There's a fee associated with balance transfers but it won't be too crazy and, assuming you pay it off, that may be the entire cost of the loan. My mother in law paid for college for my husband and sister in law on credit cards with this strategy. Now she has an incredible credit score and they don't have student loans. Good luck!
posted by kat518 at 10:21 AM on January 23


Credit card is not a bad option if you are sure you can repay it fully before you start having to pay interest on it (or transfer the balance to a new 0% interest card).

If you are interested in the credit union option, Google around to find credit unions near you, and then just call or go in and tell them you're looking for a $3,000 personal loan (sometimes also called signature loans) to pay for tuition, and see if they can help you. If they offer something like that they will walk you through the application process.
posted by aka burlap at 10:42 AM on January 23


When I was in this position my last year of college, I used a credit card (the preexisting horribly high-interest one I'd had since I turned 18, to be exact). I racked up about $5k of debt, paid it off within a year after graduating (and that was as a liberal-arts major who was basically still working minimum wage after college). If I had to do it over, yeah, I'd have looked for a card with lower/no interest, because it was a pain in the butt, but in the grand scheme of things $3k is really not something I would overly worry about.
posted by celtalitha at 11:17 AM on January 23


You are still being charged interest during the 0% period, which will all be added to your total at the end of the 0% introductory period. If you are in any way unsure of your ability to pay off the card before the 0% period ends, you could end up eating $600+ in interest - the first year. If it takes you more than a year to pay off, you could easily pay double your loan value in interest. It's worth talking to the Bursar about a payment plan for at least a portion.
posted by stoneweaver at 11:25 AM on January 23


Before everybody jumps on the credit card train -- Driven, does your school take credit cards? Some do, and some don't. Wherever you go to pay the tuition bill (that website, that office, whatever) should have the information on whether you can pay by credit card or not. If not, do you still have some money saved?

If you do have some money saved -- before you work yourself into a lather about this tuition issue instead of doing your actual schoolwork (especially since you say that you've run into academic problems before because you've focused on paying the bills -- it will happen again right now if you let it) think about whether you want to just pay it off with some of your savings right now and forget about it.

If the problem is that you don't have the entire lump sum to spare right now but you'll be able to put $3,000 in cash toward tuition over the course of the semester, a lot of schools also have payment plans (1/4th of tuition for four months, stuff like that) which aren't based on financial aid. The deadlines for those might have passed already though, since your classes have begun -- you'll have to check on the site/at the office where you pay your bill.

If you don't have enough money saved but can use a credit card, you can look for credit card offers and apply online. I know Chase is always having promotions, for example. If you're at a loss and/or don't want to apply online, a lot of banks have credit cards, too. In that case, you can just go down to your bank and apply while sitting right across from the person putting your application through. Most banks pressure their workers to sign people up for credit cards, so everyone will be delighted to help you.

If you don't have money saved and the school *doesn't* take credit cards, then you can go down to your bank anyway and talk to them about taking out either a student or personal loan (depending on which one you qualify for) from them. The student loan would probably have lower interest, but at $3,000 it's not a big enough difference to stress yourself much over. There are other private student loans (Discover, for example -- you can google around to find them) but if you want some hand-holding, that's OK, you'll get that at the bank, and at an amount this low it's not going to cost you much in terms of fees/interest/etc. To give you a sense of scale, a $3,000 loan is probably not even going to hit the minimum monthly payment floor that the loan providers set, so you're probably going to have to pay the usual minimum/loan floor of $50/month for maybe five years until the loan is gone (and that's if you don't pay anything extra ever). If you're getting anxious and want exact rates, there are repayment calculators all over the place online.

The point is, get this done ASAP and don't let it distract you from *your actual schoolwork.* If sitting in class is a big deal for you right now in terms of anxiety, then you might be on the lookout for a distraction. Sounds like money is often your go-to distraction in just such cases, so this money drama is sending up a warning sign to me. Not saying that to be judgmental, saying that because I have been in your exact same shoes, just last semester in fact. It's OK, just get this cleared up and move on to your actual priority -- your classes. DON'T SABOTAGE YOURSELF.
posted by rue72 at 1:32 PM on January 23 [1 favorite]


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