Thursday, June 21, 2012

College tuition and financial aid

I've become a mini expert on college financial aid - haha!  Last week my son's girlfriend came to me looking for some advice.  She is transferring into a private 4 year college in August (as a junior) and needs $15,000 in loans to cover the rest of her tuition and board.  She had applied for loans at her credit union and 2 banks, with her dad as co-signer.  All turned her down because her dad's credit score was too low....a 650.  (that's another post in itself). She wasn't sure what to do and her parents had seemed to just be content to let her figure this all out on her own. Should she try to apply without his as cosigner (her score was 780, but she's only had credit a year or so), should she try to ask for smaller amounts and split up the loans with different banks? She was starting to really stress out.

A lightbulb went off as I suddenly remembered my recent reconnection with on old high school friend who's job is that of a university financial aid advisor!  I got a hold of her and she was just a wealth of very helpful information that I could pass on to son's girlfriend.  The next day girlfriends dad applied for the "Parent Plus Loan"- was approved instantly and girlfriend's all covered and one less thing to stress over.  I was so glad I remembered that I could ask this friend for advice.

I had told my mom about it over the phone that night and the next day she was at her boyfriends (still seems strange calling a 78 year old man her boyfriend!) family gathering where his daughter was talking about college for their daughter and they weren't sure how they were going to pay for it all and the financial aid was so confusing. My mom put her on the phone with me and I passed along all the info I had to her.  I haven't heard back on her yet, but she was really happy to have the info and the steps to take in the whole process.

It will be great for me too, come January of 2014, when Dd and I have to find our way through this same situation.  I hadn't really thought of it much as an option, (unless Dd gets scholarships) as my mom will pay her tuition, but it sounds like we definitely need to go through the whole financial aid process first, to at least see if she qualifies for any aid first. 


  1. Fill out the FAFSA as soon as you file your taxes! And then follow up with the IRS to be certain your return wasn't lost (learned this one the VERY hard way). The sooner all your paperwork is verified the better your aid if you qualify --- so do it all as early as possible.

  2. Parent plus loans still need to be paid back. I'm really concerned about the girl's Dad having a very low credit score and taking on more debt. My advice would have been to stay in college locally, go to work and pay for college in cash. I don't think parents should be saddled with debt to pay for their children's college education. But that's just me.

  3. Sharon - she did go to college locally at a community college these first 2 years to save money. Even though the Parent Plus loan will be in her parents names, she will be the one paying the loans off that she will need the next 2 years (possibly 3 if she does her masters too). There really isn't a public 4 year college close enough that she wouldn't either have a horrific commute or have to live on campus. She did get a partial scholarship from this private school as her grandfather was an alumni, from what I understand.

    I don't think her parents mind getting the loan (or being a co-signer, if it had worked out that way) but Girlfriend knows it will be SHE who pays the loans off. I have no doubt that she will be able get a job once graduated and be financially responsible to pay these loans off. She is a smart, very determined young lady who will not have any problems succeeding her career choice. And I'm sure the rate/terms on this Parent Plus loan is much better than they would have gotten with a private bank loan.

    On the other hand, the fact that her parents have such a low credit score is kind of surprising. Dad has a good management job, mom works part time. He just got a very nice raise and they just purchased a new car - maybe that is the reason for the current low score, I don't really know how well they pay their bills. Since my own bankruptcy almost 2 years ago I have followed my credit score on (from what I hear it is pretty close to actual scores, but I really don't know for sure) and even with us having a bankruptcy my credit score is showing at 684 and Dh's at 696. I was sure surprised to hear they possibly have a lower credit score than us.

  4. And Sharon - yes I totally agree that she could be working more to pay for her college rather than taking out so much in loans! In that regard, I think that is how she is like her parents - likes to spend on *things* not really that necessary rather than save. She should have been saving every dime from her part time job rather than buying new clothes, eating out, etc.

  5. Co-signing for a loan is never a good idea, but I do understand her predicament. It's just a shame that the cost of a college education is so high.

    Her parents may have too much debt causing the low credit score, although my guess is that there are some late payments. We just never know what others' finances are, do we? Glad she will be able to go to school.

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