Not sure how I'm going to get to school, please help.
July 11, 2011 2:02 PM   Subscribe

I need to find student loans in order to go back to college in September, but my parents have terrible credit and I can't find an alternative cosigner. I don't know what to do.

None of the organizations my school suggests for loans will approve a loan due to my parents credit. Is there anywhere that will? I understand that I might need to pay more interest in the future and that there might be other drawbacks as well, but loans are the only way I'll be able to afford to go to school.

Additional question: I know that student loans will pay for on-campus housing, but could I use funds from a loan towards an apartment? I want to avoid living on campus if at all possible, but I probably won't be able to afford to do so without a loan.
posted by JimBennett to Education (10 answers total) 1 user marked this as a favorite
Have you put these questions to your school's financial aid office? They exist to help you navigate these exact issues.
posted by pupstocks at 2:03 PM on July 11, 2011

...could I use funds from a loan towards an apartment?

Usually, any part of the loan that isn't used on tuition is given to the student as a lump sum.
posted by griphus at 2:06 PM on July 11, 2011 [1 favorite]

Response by poster: I'm currently in talks with them, yes, but they're not the most helpful people in the world and I'm hoping somebody here will have a suggestion that my school might not provide.
posted by JimBennett at 2:10 PM on July 11, 2011

I assume that you've already applied for Direct Student Loans by completing the FAFSA?

To answer your question about off-campus living, yes you can use student loans to pay for off-campus living expenses. It works like this: If tuition is $20,000/year and you need approximately $10,000/year for rent, utilities, etc., you can apply for a $30,000 loan. The school will take their cut for tuition and then mail you a refund check or direct deposit part of the remaining $10,000 each semester (sometimes they split it in half). Some landlords will allow you to prepay several months rent up front, so you don't have to worry about monthly payments.
posted by chara at 2:11 PM on July 11, 2011

Unless things have changed since I got my student loans, you don't need a cosigner for direct student loans.
posted by AlliKat75 at 2:30 PM on July 11, 2011

Go through your Financial Aid people. They should be responsive. If they aren't, mention it to someone at Admissions. Most schools are dependent on the funds derived from student financial aid. Be advised that they can't do much for you, unless you've filled out your FAFSA. If you've done the FAFSA, they should help arrange government subsidized financial aid loans which will mostly cover tuition and cost of living.

If the institutions are checking your parent's credit, or your own, it sounds like you are talking to private lenders. You should not be talking to private lenders.

Before going to any private lenders, you should either work to pay your way through school (yes, it's still possible) or consult a local loan shark--although he'll kneecap you if you miss a payment, the interest rate will probably be competitive with a private lender.
posted by Hylas at 3:04 PM on July 11, 2011 [1 favorite]

I'm assuming you've filled out a FAFSA and been awarded all of the Stafford Loans, Perkins Loans, and/or Pell Grants that you are initially eligible for. Next they'll say your parents have to borrow, but if your parents do not qualify for Parent PLUS loans (due to credit) you should be eligible for additional Stafford Loans from the U.S. Government.

Also, in the case of private student loans, when I went to school, no credit was the same as good credit. You don't mention your own financial situation, just your parents', but as long as your credit is not BAD, you could probably qualify for some private loans on your own. That doesn't mean you SHOULD.

Finally, (admittedly a little outside of the scope of the question), don't forget that these are loans, and you do have to pay them back, and you can almost never get them discharged or cancelled so try to limit the amount you borrow to the absolute minimum you NEED. Do you want to be paying for your own school until your kids go to college? Just something to keep in mind.
posted by terilou at 3:22 PM on July 11, 2011

Oh, and depending on where OP goes to school, Hylas, government subsidized financial aid loans may not even come close to covering tuition & cost of living.
posted by terilou at 3:25 PM on July 11, 2011

Response by poster: My school's fairly expensive, so even with all the governmental grants and loans I'm getting, it still isn't enough. I have no credit, and my financial aid adviser has implied that I'm not going to get a loan without any credit, but I think I'm going to apply for one or two anyway.

As for paying the loans back: I'm going to school to enter a fairly high paying, specialized field. If it takes loans in order to get into that field in the first place, then at least I'll be able to pay them back later. But you're right, I'm only going to borrow what I need and work for what I can.
posted by JimBennett at 3:36 PM on July 11, 2011

Could you do Tuition Pay from Sallie Mae? They let you break it up into payments, and it's not really a loan. I don't think they require any credit check, or they probably wouldn't have let me do it.

However, if your school is very expensive, that might not be an option - I write a five hundred dollar check each month to them, which is why I live on fifty dollars a paycheck of food and haven't bought new clothes in nearly a decade.
posted by winna at 4:23 PM on July 11, 2011

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