Parent Plus Loans-Chp 13

[abby2]

Filed Chapter 13 September 2009. We have twins starting college next month. Trying to finalize their financing. We were told to apply for the Parent Plus which we would then be denied-because of the chp 13. Then they would be eligible for an additional $4000 of unsubsidized loans. Received notice today we were APPROVED for the parent plus. WHAT??? Is it possible to proceed with these loans and defer payment til after graduation (at which time we would be done with the BK)? Not sure where to go with this one. Still trying to grasp the idea that we were approved for loans during a 13-ugh!!
Any help will be greatly appreciated. Thanks.

[Pandora]

did you get approval from your trustee to apply for those loans? That may be your only way out... but the trustee may frown that you did it without his/her consent to begin with.

[mrskal]

It is based on credit score. I applied for one last year and was approved as well. I was shocked cuz I knew our credit was not too good, I could not even get a measly store CC. Luckily, my daughter decided to go to Comm. College and we did not need it. Thank God, I never wanted to be in that position anyway. My daughter was all set to go this August to the big college, and she would have to take out all the loans since one of the requirements is to not have any 90 day lates in the last five years, which I do now. When she really added it up, even after all the times I talked with her about it, she said " so, when I am done with school, I am going to owe like, $100,000, right?" I said, yep, and that is if you finish in 4 years, which is not always the case. Guess where she is going this fall, Comm, College. Glad she wised up!

[dyrstr8s]

Yeah, this is a real catch 22.
Our daughter could not get any scholarships, grants, or subsidized loans because we earn too much. They said there was no need.
The university financial aid office told us to apply for the parent plus loan and after we were denied, she would be eligible. Unfortunately, we were approved! So we had to cancel the loan and she had to take out unsubsidized loans for tuition and work full time (plus we help pay her living expenses every month).
Basicly, FAFSA says even though you have this huge bk payment every month you need to pay for your child's education, but bk law says just because you have to pay for your child's education doesn't reduce your payment at all.
Don't get me wrong- there's nothing wrong with her working to help pay for her education and we gladly pay what we can to help her, but couldn't she at least get a break on her loan terms?
End of rant. Done feeling sorry for myself now.

[Pandora]

Basicly, FAFSA says even though you have this huge bk payment every month you need to pay for your child's education,

That is not how FAFSA works - FAFSA is a guideline of what the "family contribution" should be - that doesnt mean that mom and dad MUST pay that - it means that that amount will be the amount the college student must pay. Doesnt obligate you by any means.

And... FAFSA is voluntary - while colleges may state FAFSA is mandatory for their school - thats fine, you can fill it out to see what your child qualifies for, however a student can get a personal loan on their own to go to school if need be - without FAFSA. They can do it without FAFSA. Been there - done that. ;)

[mrskal]

That is not how FAFSA works - FAFSA is a guideline of what the "family contribution" should be - that doesnt mean that mom and dad MUST pay that - it means that that amount will be the amount the college student must pay. Doesnt obligate you by any means.

And... FAFSA is voluntary - while colleges may state FAFSA is mandatory for their school - thats fine, you can fill it out to see what your child qualifies for, however a student can get a personal loan on their own to go to school if need be - without FAFSA. They can do it without FAFSA. Been there - done that. ;)

I totally agree, you do not "have' to pay for your child to go to college. You may want to, but you dont have to.

[NowImDownInIt]

did you get approval from your trustee to apply for those loans? That may be your only way out... but the trustee may frown that you did it without his/her consent to begin with.

Not really (in all cases), my trustee requires that I start the process and get approval for the loan before I submit any "request to incur debt form." The form requires that you list the terms and reasons for incurring the debt. This may vary by trustee. I would call his office and see where to go from there.