Student loans for not-a-student
March 17, 2011 1:07 PM   Subscribe

Can I, over a year later, take out a student loan to cover school debt?

Background: I went to school fall semester of 2009/2010. I applied for 4 or 5 student loans, and all of them were denied. So I owed the school 10,050 dollars. The school sent it to a debt collections agency. I was making payments, but then was fired from my job. I contacted the loan agency, and told them I'd have to stop payments. They stopped the autmoatic withdrawal. I've gotten another job now. I called them, and they've said that since I defaulted on the last payment plan, I'd have to make a down payment to start a new one. I don't have several thousand dollars to give them right now.
So...It's been over a year since applying for those last loans, and since then I've erased other bad marks on my credit and have been doing well-constant money in the bank account, no overdrawing, etc. Is it possible for me to apply for student loans now, when
1)It's over a year later, and
2)there's the fact that I owe a debt collector money, not the actual school? Will a student loan cover this? And, if not, what type of loan should I apply for [if any.]
posted by shesaysgo to Work & Money (9 answers total)
If you're not currently a student, I don't think there's any way you can qualify for a student loan. If you are a student, you can take out a student loan, but all of the loan programs I'm familiar with only allow you to take out loans for tuition and approved living expenses. My federal loans specifically state that no budget increases will be given to pay past debts. So no, I don't believe there's any way to do this with student loans. Though I would recommend calling the loan section at the Department of Education to find out if you have any other options.

If you're employed and have a steady income, you might consider a personal loan at your bank. Your credit has probably taken a hit from the default on your school payments, but you may still be able to find someone to give you a personal loan. Ask your bank or credit union if you can get a loan from them.
posted by decathecting at 1:12 PM on March 17, 2011 [1 favorite]

I do not think that this is possible.
posted by k8t at 1:18 PM on March 17, 2011

No, you cannot get a retroactive student loan.
posted by Lobster Garden at 1:39 PM on March 17, 2011

Is there some sort of proof/clause/law/etc that I can read, or is it varied from lender to lender?
posted by shesaysgo at 2:08 PM on March 17, 2011

Sure, the collection company wants you to make a down payment. But what happens if you send them a check for what you can afford? Will they not take your money? I doubt it. I'd call them again and ask to speak to a supervisor.
posted by Monday at 2:59 PM on March 17, 2011

If your credit is good and you have reliable income, you can try to get a personal loan or line of credit from your local credit union – I was able to get one (for school expenses that didn't qualify for a student loan since it wasn't a degree program and I already have a four-year degree) at 8-9% interest with no other fees whatsoever.
posted by halogen at 3:26 PM on March 17, 2011

My university misplace my last student loan check. When they found it, I had already graduated. They wanted the money for the last semester, but because they didn't cash the check, I was no longer able to use those funds to pay for my last semester. Crazy, right? But it was clear that you have access to student loan funds while you are a current student. The moment you graduate you can't use or get them, even if agreed upon while a student.
posted by qwip at 5:28 PM on March 17, 2011

I work in Federal loans at a major university and I can tell you that if you are not a student, you will not be able to take out a student loan. I'd like to know more about what kind of student loan it is. Is it a Federal Perkins loan or some sort of institutional loan (something you obtained from the school with a short pay-off term)? There might be ways to get your loan recalled from the collection agency and back to the school. Then you can either pay it back to the school in monthly installments or you can consolidate it through Direct Loans: . Please let me know and maybe I can advise you of your options.

posted by ATX Peanut at 6:32 AM on March 18, 2011

Dang it, the link didn't post:
posted by ATX Peanut at 6:33 AM on March 18, 2011

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