Anyone have experience with Student Loans?

[Joyfullyblessed]

Hello,

 

My eighteen year old daughter is about to begin college in the Fall. She did receive the HOPE scholarship, but it does not cover all costs. She just called me to say that she is going to apply for a student loan. She figures this will cover what is not paid by HOPE for tuition, plus books, etc...

 

She is also saying that she wants to use this loan to pay for her living expenses. She wants to quit her jobs and focus on being a student full time and basically live off the loan.

 

I have absolutely no experience with student loans, but this sounds unrealistic. Is this actually possible???

 

I just don't know if this is a smart move at all, but she will not listen to me and my advice. She seems to think she has it all worked out now.

 

Also, is there a better loan to look at over another? Just curious. Not sure if anyone even knows how this all works, but my daughter has me thinking now.

 

Thanks and have a great day!

[learningmama]

It may be better to ask this question in the high school/college forums. I do know that undergrad loans are based on parents income/taxes so you would have to provide the info. There are usually deadlines in the spring/summer in which to apply for federal loans for the fall. Sometimes private loans can be obtained, but she would need a co-signer.

Will she be living in a dorm,home, apartment? Loans usually cover dorm expenses, I believe. But the loans that cover all living expenses are generally reserved for grad students who are not dependent on their parents.

I do think that focusing on academics while in college IS a good idea and not having to juggle jobs with it is helpful. But you have to do what you have to do.

[bnrmom]

Make sure she is looking at subsidized loans - those are the ones that defer interest and payments until the student graduates. I'm still paying mine off, but they are one of the best loan deals around, and it's the only way I got through school, so it was worth it to me.

 

Unsubsidized loans start accruing interest immediately.

 

Make an appointment with the financial aid office at her school. They should be able to walk you through all the available options.

[Spryte]

Yes, make sure she is looking at subsidized loans, not loans that will accrue interest before graduation.

 

I received grants and used student loans for part of my living expenses while in school. Money was tight, and I worked during the summers. I also part-time nannied for one of my professors for a few years, and then later I was a live-in part-time nanny for another professor. That helped, because I didn't have rent (I lived in the MIL apartment, so still had to pay for food, etc). Thankfully, my parents kicked in some each month too, or I could not have made it work as well as I did.

 

I don't think she's crazy to try this, but not knowing the specifics of her situation - where she will be living, etc - it's hard to say if it will work comfortably. I would talk to the financial aid office with her. It's probably hard for her to totally grasp the idea of paying back these loans, since it's so far in the future (to a teen).

 

One bonus to the student loans, at least the subsidized loans, is that if she *must* she can defer payments at some point. I don't remember how it works, but in the event that she is ill or unemployed, student loans can be deferred without hurting one's credit for a specific amount of time. So it's better than, say, credit debt, in that regard. Double check me on that, though, it's been awhile since I've been in school.

 

Good luck!

[JulieH]

She won't be able to get a student loan, other than the stafford loan, without a cosigner. She'll be able to get a subsidized for 4500 and unsubsidized for 2000...those are federal loans. Then you have to go to private (unless the parent is going to take out a Parent PLUS loan)

 

It is virtually impossible for an 18 year old to get a private student loan without a credit worthy cosigner. We've just been through the whole thing and it was a pain in the behind.

[JulieH]

That depends on the parent's income. If it is below a certain amount the student can essentially be considered independent (I was so my parents never had to borrow any money for me).

 

True, but it's not common (to be able to be considered independent) , and there's still a limit as to how much they can take out for the Federal loans.

 

EVERYTHING has changed with the student loans in the past couple years since the changes were thrown in with the health care package. sigh.

[Joyfullyblessed]

Thank you for all the replies. I had actually realized I had posted in the wrong area, so I went and posted this on the general board as well. I plan on looking over these responses and jotting down a few notes to pass on to my daughter.

 

She is currently living on her own in a very small basement apartment. She didn't want to live at home, tried to live at her grandparents and didn't like that either, so now she is in the apartment. Reality is hitting her pretty hard right now.

 

She also has two jobs which she claims to dislike greatly. I think if she could find a good loan, drop down to one job part time, and go to college also, it might work well for her.

 

We shall see. Thanks again for the information. :)