What are my options for private student loans?
March 28, 2005 12:36 PM Subscribe
What are my options for private student loans?
(I have checked the archives, and while there was some helpful info in there, I decided to post this anyway. Sorry in advance for the supa-long question, just wanted to fill in as many details as I can!)
I'm a 26-year old full-time student. I'm finishing up my 2nd year at a 4-year art school in New York City. I commute there from southern CT, and the commute and the fact that I'm so far away is killing me. I work full-ish time near home right now (I say full-ish because it's technically not full-time hours right now, but they let me keep my salary and I work enough hours in the summer to more than make up for it - think 90+ hours/week). I'm not happy at my job (I've been there too long and I'm too attached to it to keep going without it affecting other areas of my life), and I really want to leave, but financially, I don't know how to swing it.
The commuting/working at home arrangement worked for all of last year and the first half of this year, but this semester, I want to die. Next year is going to be just THAT much more intense - I've spoken with juniors and instructors from my school, and I've realized that I can't work this much and devote enough time to school that it needs. I really feel like I'm missing out on a lot (culturally and socially) by not living closer to school. I feel like I should make the next two years "worth it," and if I stay here, I don't feel I can.
Right now, my parents are helping me with tuition (I plan on paying them back later since I took time off from college only to return long after they thought I ever would), but I pay for books, supplies ($$$ - I'm a photo major), commuting, and any other costs that arise. Basically, I feel like the physical distance from school/New York is putting a damper on my education, and for the money I'm (right now, my parents, but in the long run, I'm) paying and the sacrifices I've made to go there, I should be getting everything I possibly can out of this opportunity.
I tried looking up information on private student loans to see if I could move closer to school (there's no way my parents can help me with rent & related expenses), but the truth is, all of the information that's out there is confusing and overwhelming and I don't know where to begin even THINKING about this, let alone applying for loans.
I have a small amount of money (around $3K, I know not much) saved, and the only other consistent expense that I have is my cell phone. I do own a car (finished paying for it last summer), and if I have to, I can sell it (I can probably get around $6K for it). I have good credit, and my parents have stellar credit and would most likely be willing to cosign a loan if I needed needed them to.
Have any of you had any similar expierences? What did you do? What should I absolutely NOT do? FWIW, I'm not afraid or put off by hard work, and if I do go through with this, I do plan on getting some kind of job - ideally it would be in the photo/art field, but I have expierence in other areas (accounting, retail), so I feel like it won't be too hard for me to find a part time position, but I know that this will no where NEAR cover the expenses of living in NYC. I know that it may be a fairytale wish, but I'd like to have a job that I don't have to care about that much, so I can put my full attention where it needs to be - on school and photography.
(I have checked the archives, and while there was some helpful info in there, I decided to post this anyway. Sorry in advance for the supa-long question, just wanted to fill in as many details as I can!)
I'm a 26-year old full-time student. I'm finishing up my 2nd year at a 4-year art school in New York City. I commute there from southern CT, and the commute and the fact that I'm so far away is killing me. I work full-ish time near home right now (I say full-ish because it's technically not full-time hours right now, but they let me keep my salary and I work enough hours in the summer to more than make up for it - think 90+ hours/week). I'm not happy at my job (I've been there too long and I'm too attached to it to keep going without it affecting other areas of my life), and I really want to leave, but financially, I don't know how to swing it.
The commuting/working at home arrangement worked for all of last year and the first half of this year, but this semester, I want to die. Next year is going to be just THAT much more intense - I've spoken with juniors and instructors from my school, and I've realized that I can't work this much and devote enough time to school that it needs. I really feel like I'm missing out on a lot (culturally and socially) by not living closer to school. I feel like I should make the next two years "worth it," and if I stay here, I don't feel I can.
Right now, my parents are helping me with tuition (I plan on paying them back later since I took time off from college only to return long after they thought I ever would), but I pay for books, supplies ($$$ - I'm a photo major), commuting, and any other costs that arise. Basically, I feel like the physical distance from school/New York is putting a damper on my education, and for the money I'm (right now, my parents, but in the long run, I'm) paying and the sacrifices I've made to go there, I should be getting everything I possibly can out of this opportunity.
I tried looking up information on private student loans to see if I could move closer to school (there's no way my parents can help me with rent & related expenses), but the truth is, all of the information that's out there is confusing and overwhelming and I don't know where to begin even THINKING about this, let alone applying for loans.
I have a small amount of money (around $3K, I know not much) saved, and the only other consistent expense that I have is my cell phone. I do own a car (finished paying for it last summer), and if I have to, I can sell it (I can probably get around $6K for it). I have good credit, and my parents have stellar credit and would most likely be willing to cosign a loan if I needed needed them to.
Have any of you had any similar expierences? What did you do? What should I absolutely NOT do? FWIW, I'm not afraid or put off by hard work, and if I do go through with this, I do plan on getting some kind of job - ideally it would be in the photo/art field, but I have expierence in other areas (accounting, retail), so I feel like it won't be too hard for me to find a part time position, but I know that this will no where NEAR cover the expenses of living in NYC. I know that it may be a fairytale wish, but I'd like to have a job that I don't have to care about that much, so I can put my full attention where it needs to be - on school and photography.
Your first stop should be te financial aid department of the school. You will have to fill out a FAFSA application for any government loan. it determines your ability to pay. Some options after that are Stafford loans, PLUS loans for your parents, or private loans. But your school should help you navigate your options.
posted by ..ooOOoo....ooOOoo.. at 1:01 PM on March 28, 2005
posted by ..ooOOoo....ooOOoo.. at 1:01 PM on March 28, 2005
What should I absolutely NOT do?
...Start with private loans. No kidding. That should be your last resort after all other options have been maxed out.
Federal loans have subsidized rates, are consolidatable later at even lower rates, defer payment+interest while you're school or doing other good things, grant forebearances (no payments, though interest accrues) for any number of valid reasons including unemployment and no particular reason at all ("I just can't pay it right now...").
But these should not be plan A either. Start with the free money: grants and scholarships. A lot of people, even people with means, are eligible for various non-loan assistance. They're offered on all sorts of criteria: whether it be from financial need, grades, degree program & professional goal, personal background, special demographics (including being a working adult, or single parent, or having a learning disability), etc.
There's also work-study, which is a job but at least a tax-advantaged job so the dollar you earn there is worth a bit more than the same dollar earned through the regular workforce. (And sometimes work-study can be applied to neat off-campus jobs, that help your community while building up relevant career experience)
Schedule an appointment ASAP to talk with your school's financial aid counselor. And submit a FAFSA ASAP, because the good money disappears rapidly this time of year. Every day you wait = less grants, more loans. (By the way, since you're over 25, you're an "independent student", which means means-based aid will be calculated based on your income and assets, not your parents'.)
Beware of tapping your $3k savings for school, by the way. Everyone needs to keep an emergency fund of at least 3-6 months' expenses--just in case
on preview, some of this has already been said. but it bears repeating...
posted by nakedcodemonkey at 1:06 PM on March 28, 2005
...Start with private loans. No kidding. That should be your last resort after all other options have been maxed out.
Federal loans have subsidized rates, are consolidatable later at even lower rates, defer payment+interest while you're school or doing other good things, grant forebearances (no payments, though interest accrues) for any number of valid reasons including unemployment and no particular reason at all ("I just can't pay it right now...").
But these should not be plan A either. Start with the free money: grants and scholarships. A lot of people, even people with means, are eligible for various non-loan assistance. They're offered on all sorts of criteria: whether it be from financial need, grades, degree program & professional goal, personal background, special demographics (including being a working adult, or single parent, or having a learning disability), etc.
There's also work-study, which is a job but at least a tax-advantaged job so the dollar you earn there is worth a bit more than the same dollar earned through the regular workforce. (And sometimes work-study can be applied to neat off-campus jobs, that help your community while building up relevant career experience)
Schedule an appointment ASAP to talk with your school's financial aid counselor. And submit a FAFSA ASAP, because the good money disappears rapidly this time of year. Every day you wait = less grants, more loans. (By the way, since you're over 25, you're an "independent student", which means means-based aid will be calculated based on your income and assets, not your parents'.)
Beware of tapping your $3k savings for school, by the way. Everyone needs to keep an emergency fund of at least 3-6 months' expenses--just in case
on preview, some of this has already been said. but it bears repeating...
posted by nakedcodemonkey at 1:06 PM on March 28, 2005
I changed my major and lost my ride after my first year in school. I ended up working a lot and making a lot of sacrifices, but it sure beat moving back in with my parents and commuting an hour each way. I have no idea how expensive NYC is, but you may want to figure out exactly how much it's going to cost you and compare it with how much money you can bring in. Is moving out going to be worth graduating with $5,000 of debt? What about $10,000? $20,000? Will you be able to get a decent paying job in the location you want? These are all things to think about.
I can't really give you much financial advice, but I can give you a few details on the types of loans out there.
The US government offers low interest loans to students in the form of Stafford loans. Depending on your need, the government may offer to subsidize the interest (that is, pay it for you) of a portion or all of your loan while you are in school. Stafford loans do not require a cosigner, and have strict limits on the amount you can borrow. PLUS loans are low interest goverment loans that your parents can take out (there are alternatives if your parents are ineligible, but that doesn't sound applicible in your case). And finally, there are alternative (private) loans. These are loans by private lenders (banks), and generally come with higher interest rates. Depending on your credit level and income, they may require a cosigner.
Your first step is to fill out a FAFSA, which will determines your expected contribution (i.e. how much the government thinks you should be able to come up with on your own), as well as your eligibility for subsidized loans. However you choose to borrow, you will be limited to what your school estimates as the total cost of education. This total cost generally includes tuition, books, supplies, transportation, and limited living expenses.
After the FAFSA, check with your school's financial aid department, since you will most likely be applying for Stafford loans through them.
On preview: everyone's already covered it. :)
posted by asnowballschance at 1:07 PM on March 28, 2005
I can't really give you much financial advice, but I can give you a few details on the types of loans out there.
The US government offers low interest loans to students in the form of Stafford loans. Depending on your need, the government may offer to subsidize the interest (that is, pay it for you) of a portion or all of your loan while you are in school. Stafford loans do not require a cosigner, and have strict limits on the amount you can borrow. PLUS loans are low interest goverment loans that your parents can take out (there are alternatives if your parents are ineligible, but that doesn't sound applicible in your case). And finally, there are alternative (private) loans. These are loans by private lenders (banks), and generally come with higher interest rates. Depending on your credit level and income, they may require a cosigner.
Your first step is to fill out a FAFSA, which will determines your expected contribution (i.e. how much the government thinks you should be able to come up with on your own), as well as your eligibility for subsidized loans. However you choose to borrow, you will be limited to what your school estimates as the total cost of education. This total cost generally includes tuition, books, supplies, transportation, and limited living expenses.
After the FAFSA, check with your school's financial aid department, since you will most likely be applying for Stafford loans through them.
On preview: everyone's already covered it. :)
posted by asnowballschance at 1:07 PM on March 28, 2005
Word to the wise. The government thinks I should be able to pay for school myself with money left over for a Maserati. Your parents income will screw you. I only took out one government loan (for the max amount I could, $500) and had a really bad experience. Taking community college classes in the summer suddenly initiated a slew of "you are no longer attending college and must begin payment in 6 months" which took forever to clear up.
I went with private loans and haven't received any government crap that I had to deal with before. Sure the rates are slightly higher but the experience of dealing with a private lender is great.
Of course I'm sure I'm probably in the minority in dealing with public loans.
posted by geoff. at 1:24 PM on March 28, 2005
I went with private loans and haven't received any government crap that I had to deal with before. Sure the rates are slightly higher but the experience of dealing with a private lender is great.
Of course I'm sure I'm probably in the minority in dealing with public loans.
posted by geoff. at 1:24 PM on March 28, 2005
To get an idea of how much free money is sitting out there for someone like you, check out FastWeb. It's been a while since I've checked in, but I recall past matches were based on criteria as unlikely as:
-ethnic ancestry
-religion
-the place were you were born, or attended high school, or currently reside
-past affiliation (or a relative's affiliation) with various clubs, organizations, trade unions, Greek societies, etc.
-personal hobbies
-best essay on the program's specified topic
FastWeb is a good database for finding private scholarships. But don't forget that many schools offer their own. Those are usually much easier to apply for than private scholarships, so be sure to go for that low-hanging fruit!
Your parents income will screw you.
No, at socialdrinker's age it's no longer a factor.
Taking community college classes in the summer suddenly initiated a slew of "you are no longer attending college and must begin payment in 6 months" which took forever to clear up.
How recent was that? In the past, this was indeed a common occurance, but in more recent years the Dept of Ed has been strongly encouraging all the schools to particiate in automated reporting which has smoothed out and speeded up the entire financial aid-handling system considerably. For at least the last 4-5 years I've stopped having any records snafus at all. Unless a school is very small or doesn't participate in the federal financial aid system (for instance, some vocational schools...), it's highly unlikely that you'll run into such glitches today.
Private loans usually require repayment to either start immediately upon disbursement, or upon graduation/dropout. Interest also commonly accrues from day one. Both of these factors make private loans considerably more expensive than many federal loans, even if you can find a private rate equal to the fed loan.
If you do take out a private loan, be sure it at least specifies options for hardship forebearance. If you can't find work in your field right after graduation, or ever are unemployed or injured, having that flexibility to skip a few payments will be invaluable while you're trying to get back on your feet.
Another distinguishing feature of government loans is the potential for loan forgiveness.
posted by nakedcodemonkey at 1:53 PM on March 28, 2005
-ethnic ancestry
-religion
-the place were you were born, or attended high school, or currently reside
-past affiliation (or a relative's affiliation) with various clubs, organizations, trade unions, Greek societies, etc.
-personal hobbies
-best essay on the program's specified topic
FastWeb is a good database for finding private scholarships. But don't forget that many schools offer their own. Those are usually much easier to apply for than private scholarships, so be sure to go for that low-hanging fruit!
Your parents income will screw you.
No, at socialdrinker's age it's no longer a factor.
Taking community college classes in the summer suddenly initiated a slew of "you are no longer attending college and must begin payment in 6 months" which took forever to clear up.
How recent was that? In the past, this was indeed a common occurance, but in more recent years the Dept of Ed has been strongly encouraging all the schools to particiate in automated reporting which has smoothed out and speeded up the entire financial aid-handling system considerably. For at least the last 4-5 years I've stopped having any records snafus at all. Unless a school is very small or doesn't participate in the federal financial aid system (for instance, some vocational schools...), it's highly unlikely that you'll run into such glitches today.
Private loans usually require repayment to either start immediately upon disbursement, or upon graduation/dropout. Interest also commonly accrues from day one. Both of these factors make private loans considerably more expensive than many federal loans, even if you can find a private rate equal to the fed loan.
If you do take out a private loan, be sure it at least specifies options for hardship forebearance. If you can't find work in your field right after graduation, or ever are unemployed or injured, having that flexibility to skip a few payments will be invaluable while you're trying to get back on your feet.
Another distinguishing feature of government loans is the potential for loan forgiveness.
posted by nakedcodemonkey at 1:53 PM on March 28, 2005
If you're sure you want a private student loan (see the advice above), I'd recommend sallie mae. I used them for a loan and had no regrets.
posted by HiddenInput at 2:08 PM on March 28, 2005
posted by HiddenInput at 2:08 PM on March 28, 2005
NCM is definitely right about the fact that socialdrinker's financial need should not be affected by his/her parents. 26 makes you more than an independent.
I should also note that it may still be possible for you to get all of the loan funds you would have received for this year. Fill out a FAFSA on-line for this year and wait for the result (usually one-two weeks), then have your school package you and wait for the checks. I think you can get this year's financial aid (retroactive for the whole year) until June or July.
Then you can do the same thing for next year at the beginning. Might give you a little bit of a cushion moving to NYC. Three years of student loans at the maximum amount for an undergrad shouldn't be too hard to pay off.
posted by ontic at 2:15 PM on March 28, 2005
I should also note that it may still be possible for you to get all of the loan funds you would have received for this year. Fill out a FAFSA on-line for this year and wait for the result (usually one-two weeks), then have your school package you and wait for the checks. I think you can get this year's financial aid (retroactive for the whole year) until June or July.
Then you can do the same thing for next year at the beginning. Might give you a little bit of a cushion moving to NYC. Three years of student loans at the maximum amount for an undergrad shouldn't be too hard to pay off.
posted by ontic at 2:15 PM on March 28, 2005
For the record (for those worried about repetition) -
Scholarships and grants, which are NOT really the subject of this question (as I read it), are discussed on this March 19, 2005 AskMe thread, which is still open (albeit not active).
posted by WestCoaster at 2:26 PM on March 28, 2005
Scholarships and grants, which are NOT really the subject of this question (as I read it), are discussed on this March 19, 2005 AskMe thread, which is still open (albeit not active).
posted by WestCoaster at 2:26 PM on March 28, 2005
It's not worth exhausting yourself just to save a few dollars. Figure out how much you need to live on each month, and then borrow the least amount you need.
Student loans can either be subsidized or unsubsidized. Subsidized loans means the lender (usually the gov't) pays the interest while you are in school. The interest on unsubsidized loans doesn't have to be paid while you are still in school, but it capitalizes. If you get offered unsubsidized loans, see whether you can afford to pay the monthly interest payments.
Private loans may have a longer repayment plan (15-20 years); gov't loans are generally 10 (although that can be changed).
I have had much better experience with government loans than with private ones.
FWIW, $20K in loans is about $420 a month payment on a 10 year repayment plan.
posted by luneray at 2:32 PM on March 28, 2005
Student loans can either be subsidized or unsubsidized. Subsidized loans means the lender (usually the gov't) pays the interest while you are in school. The interest on unsubsidized loans doesn't have to be paid while you are still in school, but it capitalizes. If you get offered unsubsidized loans, see whether you can afford to pay the monthly interest payments.
Private loans may have a longer repayment plan (15-20 years); gov't loans are generally 10 (although that can be changed).
I have had much better experience with government loans than with private ones.
FWIW, $20K in loans is about $420 a month payment on a 10 year repayment plan.
posted by luneray at 2:32 PM on March 28, 2005
Response by poster: Thank you for all the advice thus far. Sorry - I should have mentioned this - I do fill out the FAFSA every year, and I do have stafford loans, but they are sent directly to my school and are applied directly to my tuition. They don't cover the full tuition costs (they think I should be able to pay the rest on my own apparently, HA!). Are there additional govt loans like this that I can take out? I was under the assumption that I was receiving the maximum available for my income level (which would drop drastically if I move to ny, but it's still not THAT much).
My parents also already have a loan out to help with my tuition costs - I don't know the details of it, but they've referred to it as a "parent's loan," so it makes me think that it's the PLUS loan that was mentioned. They take every opportunity to remind me that they had to take a loan out, and the truth is, I'd kind of like to do it on my own. Like I said, I am going to be paying SOMEONE back either way (the lender or my parents), so I don't really mind taking a loan out on my own.
I do think that my parents will continue to help me with tuition, I just need money for rent/food/supplies, which I do realize are considered "school expenses" as long as I'm in school.
All of you who mentioned it, you're right - I do need to talk to my school's financial aid office. I just got here for my 6pm class, and every day the commute (2 hours each way) reminds me that I MUST move here. Ugh. Between the train, the subway, the parking pass for the train station, the cabs to the train station from home when the train lot is full, I'm easily paying rent for a cheap studio. This knowledge KILLS me. :/
posted by socialdrinker at 3:12 PM on March 28, 2005
My parents also already have a loan out to help with my tuition costs - I don't know the details of it, but they've referred to it as a "parent's loan," so it makes me think that it's the PLUS loan that was mentioned. They take every opportunity to remind me that they had to take a loan out, and the truth is, I'd kind of like to do it on my own. Like I said, I am going to be paying SOMEONE back either way (the lender or my parents), so I don't really mind taking a loan out on my own.
I do think that my parents will continue to help me with tuition, I just need money for rent/food/supplies, which I do realize are considered "school expenses" as long as I'm in school.
All of you who mentioned it, you're right - I do need to talk to my school's financial aid office. I just got here for my 6pm class, and every day the commute (2 hours each way) reminds me that I MUST move here. Ugh. Between the train, the subway, the parking pass for the train station, the cabs to the train station from home when the train lot is full, I'm easily paying rent for a cheap studio. This knowledge KILLS me. :/
posted by socialdrinker at 3:12 PM on March 28, 2005
Hmmm. Well, private education loans won't get you any more, in general, than your estimated financial need covered by your Stafford loans. So I think you're going to be talking about a generic line of credit. Maybe not though, gonna brainstorm over dinner.
posted by ontic at 3:58 PM on March 28, 2005
posted by ontic at 3:58 PM on March 28, 2005
When I went back to school for my teaching license, I got a Signature Student loan from Sallie Mae. The process was pretty simple, and they let me take out considerably more than just tuition expenses (~5k/semester). My interest rate is 6.5%, but it can be lower or higher depending on your credit. The money was paid directly to the school, and then I needed to request the excess each semester from the school - the school issued a check 2-3 weeks after I made the request, so not particularly helpful for books, but definitely helpful for living expenses and whatnot.
posted by ferociouskitty at 4:15 PM on March 28, 2005
posted by ferociouskitty at 4:15 PM on March 28, 2005
Well, keep in mind that moving out comes with a lot more costs than just the rent (i.e. moving, security deposit, supplies/furnishings to setup the household, no more "mom and dad food subsidy", utils, etc.) and of course it's not a given that your commute costs would be entirely slashed unless you can get really lucky with a studio right next to both school and work. Nevertheless, it does sound like you're at the point where it's time (after finding out how much addt'l aid you can pull in, private or otherwise) for a bunch of number crunching to compare the two options. If you can swing it, certainly there's the increased quality of life--more sleep time, more study time--to hopefully make up the difference.
Also, in theory you should be able to earn a better salary in NYC than in CT for similar work. But of course the catch is: where do you find the time for all this new job searching and apt searching when you're already being stretched thin as it is?
If it's not too private a question, why is your entire aid (including the parental loans) getting eaten by tuition? Financial aid plus personal income and assets is intended to be enough to cover tuition, books, local housing, and food. No-frills living, to be sure, but there should not be a gigantic gap between reality and aid. Considering you're an indie student, with an income, plus the extra contrib coming from the folks, it's surprising that you've still been left with a significant gap to fill by other means. When you talk to the financial aid officer, be sure to ask him/her to walk you through how that happened. Maybe they're incorrectly counting your parents' assets against you...?
(Even if there's no error, financial aid officers have been known to revise your "expected contribution" based on individual circumstances. For instance when someone becomes unemployed, gets a divorce, or has an accident, they can accept documentation of the diminished ability to pay and take that into consideration for the current year's aid package. If the expected contribution is patently unrealistic, then ask what documentation you need to provide to get it adjusted to a more realistic figure.)
posted by nakedcodemonkey at 4:18 PM on March 28, 2005
Also, in theory you should be able to earn a better salary in NYC than in CT for similar work. But of course the catch is: where do you find the time for all this new job searching and apt searching when you're already being stretched thin as it is?
If it's not too private a question, why is your entire aid (including the parental loans) getting eaten by tuition? Financial aid plus personal income and assets is intended to be enough to cover tuition, books, local housing, and food. No-frills living, to be sure, but there should not be a gigantic gap between reality and aid. Considering you're an indie student, with an income, plus the extra contrib coming from the folks, it's surprising that you've still been left with a significant gap to fill by other means. When you talk to the financial aid officer, be sure to ask him/her to walk you through how that happened. Maybe they're incorrectly counting your parents' assets against you...?
(Even if there's no error, financial aid officers have been known to revise your "expected contribution" based on individual circumstances. For instance when someone becomes unemployed, gets a divorce, or has an accident, they can accept documentation of the diminished ability to pay and take that into consideration for the current year's aid package. If the expected contribution is patently unrealistic, then ask what documentation you need to provide to get it adjusted to a more realistic figure.)
posted by nakedcodemonkey at 4:18 PM on March 28, 2005
You mentioned earlier that you were 26 - at this point, if my memory serves correctly, your financial aid situation may very well improve if your parents no longer claim you as a dependent and your FAFSA is comprised only of your own financial standing. Of course, every university and college differs; I'd definitely see the financial aid office at your school for more information.
My experiences with private student loans is very limited - my husband went to an expensive school in New York City and in part financed it via private student loans (from Key Bank). With his private loans (coordinated by his school's financial aid office), he had six months after his graduation to start repayment, and a maximum of one year in which he could defer payment. He was unemployed for about a year after he graduated. The main difference I'm seeing between his loans and my government subsidized loans is that I can defer way more than he can. This might not be a big deal now, but if you're struggling after college, private loan companies don't seem as flexible as the government subsidized ones.
Other suggestions to note: do you bank at a credit union? They might offer private loans at better rates.
posted by cajo at 4:50 PM on March 28, 2005
My experiences with private student loans is very limited - my husband went to an expensive school in New York City and in part financed it via private student loans (from Key Bank). With his private loans (coordinated by his school's financial aid office), he had six months after his graduation to start repayment, and a maximum of one year in which he could defer payment. He was unemployed for about a year after he graduated. The main difference I'm seeing between his loans and my government subsidized loans is that I can defer way more than he can. This might not be a big deal now, but if you're struggling after college, private loan companies don't seem as flexible as the government subsidized ones.
Other suggestions to note: do you bank at a credit union? They might offer private loans at better rates.
posted by cajo at 4:50 PM on March 28, 2005
When I was an undergrad, I took out some private loans directly through the school. There were restrictions on the amount we could take out, but the interest rate was incredibly low. It beat going through a bank. Check with your school's finaid office and see if the school offers loans.
posted by whatideserve at 5:10 PM on March 28, 2005
posted by whatideserve at 5:10 PM on March 28, 2005
whatideserve is right. Schools often have "special relationships" with this lender or that. NYU is in a tryste with Citibank, for example.
posted by lorrer at 5:12 PM on March 28, 2005
posted by lorrer at 5:12 PM on March 28, 2005
My experience is the private lenders are harder to deal with than those of subsidized loans. For instance, I got laid off a couple years after graduating and was able to get an unemployment deferment for the entire time with my consolidated lender (Sallie Mae), but my private lender would only give me six month maximum, so I still had to pay that while unemployed (or should I say, my wonderful wife had to!)
So I'd say if you *must* take out private loans, try to go with a lender like Sallie Mae who also consolidates government loans. Though you can't roll your private loans into the consolidation, you may be able to still make one single payment - and you may get the benefit of things like a longer deferment period. Also keep in mind that from the sounds of it, your parents will have to co-sign for any private loans - which is a real responsibility albatross around your neck should you have any trouble in the future making payments.
Consider maybe getting another job for 15 hours a week - you would still be saving time. And see if you can make it without them, maybe checking out Brooklyn or somewhere slightly less expensive. Many of my neighbours are students at the SF Institute of the Arts, and they manage to live with two or three roomates in a tiny place for a few years. I'm sure it's not easy, but maybe do-able.
posted by sixdifferentways at 5:41 PM on March 28, 2005
So I'd say if you *must* take out private loans, try to go with a lender like Sallie Mae who also consolidates government loans. Though you can't roll your private loans into the consolidation, you may be able to still make one single payment - and you may get the benefit of things like a longer deferment period. Also keep in mind that from the sounds of it, your parents will have to co-sign for any private loans - which is a real responsibility albatross around your neck should you have any trouble in the future making payments.
Consider maybe getting another job for 15 hours a week - you would still be saving time. And see if you can make it without them, maybe checking out Brooklyn or somewhere slightly less expensive. Many of my neighbours are students at the SF Institute of the Arts, and they manage to live with two or three roomates in a tiny place for a few years. I'm sure it's not easy, but maybe do-able.
posted by sixdifferentways at 5:41 PM on March 28, 2005
Response by poster: If it's not too private a question, why is your entire aid (including the parental loans) getting eaten by tuition?
Because my school isn't cheap, and my parents only took out the absolute minimum they had to in order to cover the difference between the Stafford Loans I was given and the tuition of my school. It's understood that I am entirely responsible for books, supplies, and travel costs to & from school. Whether or not they're technically "school exepenses," I am responsible for them (as I should be).
your financial aid situation may very well improve if your parents no longer claim you as a dependent and your FAFSA is comprised only of your own financial standing
Yep, they don't claim me, and I don't even think my school knows my parent's names. I'm on a monthly payment plan with school, and each month my dad deposits money into my checking account for me (a credit union (!) branch is down the hall from his office), and I write a check to school. (I know, I worried about this situation too, but their accountant assured them that it shouldn't be a problem. It BETTER NOT BE A PROBLEM, because I'm the one who'd be getting nailed.)
Consider maybe getting another job for 15 hours a week - you would still be saving time. And see if you can make it without them, maybe checking out Brooklyn or somewhere slightly less expensive.
That's what I'd like to do, ideally. I'm actually in the process of picking out next year's classes AS I TYPE, and yeah, there's gonna be no way I can work more than 15-20 hours a week total and still have time do go to class and do everything I need to do for these classes.
I also have no problem living outside of Manhattan - I really like Brooklyn actually, and I have friends who used to live in the Bronx and liked it a lot (I'm not too familiar w/ the Bronx though). I'd like to be close enough though to make moving there worth it time-wise - I'm good friends with someone who commutes from Staten Island, and while signifigantly cheaper, her commute takes 1.5 hours each way (mine takes 2).
I'm going to call tomorrow and make an appointment with the financial aid guy at my school. I am going to make a list of all the facts, I am going to read it to him, and I'm gonna say, "ok. what do I do now? Because I HAVE to make this work."
Also, each and every one of you rocks. I've tried having this conversation with several people, where I was simply ASKING FOR ADVICE or to find out if maybe all the people around me knew something I didn't (like where a giant pile of money is, ha!), and every single one of them said something to the effect of, "You fool, why the F would you quit a full time job to dedicate more time to school?" These are the same people who told me I was stupid to go be a 24 year old freshman when I already have a decent job, but to be honest and totally cheesy, going back to school was the best thing I've ever done.
posted by socialdrinker at 9:03 PM on March 28, 2005
Because my school isn't cheap, and my parents only took out the absolute minimum they had to in order to cover the difference between the Stafford Loans I was given and the tuition of my school. It's understood that I am entirely responsible for books, supplies, and travel costs to & from school. Whether or not they're technically "school exepenses," I am responsible for them (as I should be).
your financial aid situation may very well improve if your parents no longer claim you as a dependent and your FAFSA is comprised only of your own financial standing
Yep, they don't claim me, and I don't even think my school knows my parent's names. I'm on a monthly payment plan with school, and each month my dad deposits money into my checking account for me (a credit union (!) branch is down the hall from his office), and I write a check to school. (I know, I worried about this situation too, but their accountant assured them that it shouldn't be a problem. It BETTER NOT BE A PROBLEM, because I'm the one who'd be getting nailed.)
Consider maybe getting another job for 15 hours a week - you would still be saving time. And see if you can make it without them, maybe checking out Brooklyn or somewhere slightly less expensive.
That's what I'd like to do, ideally. I'm actually in the process of picking out next year's classes AS I TYPE, and yeah, there's gonna be no way I can work more than 15-20 hours a week total and still have time do go to class and do everything I need to do for these classes.
I also have no problem living outside of Manhattan - I really like Brooklyn actually, and I have friends who used to live in the Bronx and liked it a lot (I'm not too familiar w/ the Bronx though). I'd like to be close enough though to make moving there worth it time-wise - I'm good friends with someone who commutes from Staten Island, and while signifigantly cheaper, her commute takes 1.5 hours each way (mine takes 2).
I'm going to call tomorrow and make an appointment with the financial aid guy at my school. I am going to make a list of all the facts, I am going to read it to him, and I'm gonna say, "ok. what do I do now? Because I HAVE to make this work."
Also, each and every one of you rocks. I've tried having this conversation with several people, where I was simply ASKING FOR ADVICE or to find out if maybe all the people around me knew something I didn't (like where a giant pile of money is, ha!), and every single one of them said something to the effect of, "You fool, why the F would you quit a full time job to dedicate more time to school?" These are the same people who told me I was stupid to go be a 24 year old freshman when I already have a decent job, but to be honest and totally cheesy, going back to school was the best thing I've ever done.
posted by socialdrinker at 9:03 PM on March 28, 2005
"(Even if there's no error, financial aid officers have been known to revise your "expected contribution" based on individual circumstances. For instance when someone becomes unemployed, gets a divorce, or has an accident, they can accept documentation of the diminished ability to pay and take that into consideration for the current year's aid package. If the expected contribution is patently unrealistic, then ask what documentation you need to provide to get it adjusted to a more realistic figure.)"
Yes, this is absolutely true! It happened to me -- I was receiving disability payments for a while because of injuries caused by an accident, and so I decided to go back to school and finish my BA. Just as I got to school the insurance company cut off my disability, claiming they didn't have to pay any more. I had *no* money whatsoever, as that disability had been my only income for nearly a year, and it was only 60% of my previous income.
So I went in to the financial aid office right then and they found an additional grant for me, and qualified me for a state work-study position (I could work part-time hours, just not full-time at my old job -- I was on disability while I did physical therapy and treatment until I could work my old job or a similar one full-time again), and also gave me another small emergency loan. So I was able to survive. I was very, very broke -- no question about that. It was a tough year. But I survived, and then at the end of the year the insurance company backed down (after my lawyer challenged the denial of benefits) and paid me the entire amount of income I *should* have gotten over the year, in a lump sum -- so it worked out OK. And I graduated.
So, I am glad you are going to see the FA officer. I think they will help. Of course, some schools are more helpful than others -- but hopefully your school will help you in this.
posted by litlnemo at 1:17 AM on March 29, 2005
Yes, this is absolutely true! It happened to me -- I was receiving disability payments for a while because of injuries caused by an accident, and so I decided to go back to school and finish my BA. Just as I got to school the insurance company cut off my disability, claiming they didn't have to pay any more. I had *no* money whatsoever, as that disability had been my only income for nearly a year, and it was only 60% of my previous income.
So I went in to the financial aid office right then and they found an additional grant for me, and qualified me for a state work-study position (I could work part-time hours, just not full-time at my old job -- I was on disability while I did physical therapy and treatment until I could work my old job or a similar one full-time again), and also gave me another small emergency loan. So I was able to survive. I was very, very broke -- no question about that. It was a tough year. But I survived, and then at the end of the year the insurance company backed down (after my lawyer challenged the denial of benefits) and paid me the entire amount of income I *should* have gotten over the year, in a lump sum -- so it worked out OK. And I graduated.
So, I am glad you are going to see the FA officer. I think they will help. Of course, some schools are more helpful than others -- but hopefully your school will help you in this.
posted by litlnemo at 1:17 AM on March 29, 2005
This thread is closed to new comments.
But don't worry, this is probably doable. Student loans are good debt at a lower interest rate and meant for people like you (just don't go crazy, taking out as much as you can for 6+ years).
As for what you absolutely should not do -- start living off your high interest credit cards once you get to NYC. Try to get one with a low interest rate and a maximum of 1-2k credit line (then don't let them raise it). Cut up the rest (don't close the accounts). And when you feel you need to spend money just go to your favorite place in NYC to remind yourself what you're sacrificing for.
posted by ontic at 12:55 PM on March 28, 2005