Daughters college needs documentation that I cannot incur new debt

[LadyInTheRed]

Hi, Pandora. Back in the stone age when I was applying for financial aid, until I was a certain age (21 maybe) they assumed my parents would contribute to my education when determining my eligibility for need-based financial aid. They didn't say my parents had to take a loan, but I was considered a dependent student and the expected family contribution was included whether my parents actually contributed or not. The amount of federal student loan I could take was limited by my financial need which was reduced by the family contribution. It sounds like the college wants evidence that the parents have no way to contribute so that they can consider the daughter an independent student for calculating her financial need.

[suzychapstic]

What I was told by the college, was that I must:
1. Do the Fafsa
2. Next see what she qualifies for which was $3500/yr stafford loan
3. For her to borrow additional money in her name alone, I had to apply for the parent plus loan, be denied, and then she can borrow an additional $4000/yr

I am not able to co sign a private student loan for her or take out the parent plus loan......Yes, the college told me those were the steps that I had to take since she is considered a dependent. Once denied for the parent plus loan, they consider her an independent borrower but not an independent student eligible for pell grant or anything. So she pays full price, but since the 3500 was not enough to cover costs, they gave her an additional 4000......She had a few scholarships in there too thankfully to take the cost down. I am not sure what would happen if the 4000 was not enough to cover the costs. I was under the assumption that the student was able to borrow up to the cost of attendance. I was also under the assumption that it was easy for kids to get student loans, but that has not been the experience we have had.

The one good thing, though, is that because of the fact that we are in a CH13, all of the loans are in her name, and do not require payments to start until 6 months after graduation. If we were able to borrow, we would have had them in our name, with payments starting now. Also, then those loans will not potentially qualify for any of the loan forgiveness programs, if they exist when she is out of school.

Was your daughter emancipated or over 24? That seems to be the difference.....Oh, or she could get married really quick or have a baby and then she would be considered independent....I would rather have her take out student loans than do either of those at 19.

[Pandora]

LITR

Yep, it still works the same way pretty much....our daughter was not emancipated nor was she over 24. We were required to fill out FAFSA and do all the other things, however we did not apply for loans, etc. She got them all in her name - whether they be private or gov't backed and therein lies the difference I believe. We had to fight hard with the schools and the FAFSA / gov't people....but we won the battle.

@suzy - no she wasnt married nor pregnant when she applied I hear ya on that! She was 19 as well...but we managed to get it all done in her name alone. She is however, now married at almost 24

[woeisme]

Pandora, the current law is that the guaranteed student loans are limited to a specific amount (depends on what year in college the student is in) and to borrow additional money beyond the maximum allowed amount (in this case, $3500), the student has to prove that the parents don't qualify for a parent plus loan first. She could get private loans instead, but they have much worse terms, and would almost surely require a cosigner due to the student's lack of credit. The college isn't pulling some bs, that is what they are limited to by the law, and the hoop they are required to jump through to get additional federal student loan money.

[Pandora]

woeisme

Yes I'm aware of how it works... We simply refused to apply for any loans, period. Filling out FAFSA is all thats required by law - applying for loans is not - our daughter had to apply every single year before she was married 2 years ago. Was it more expensive for our daughter in the long run? Yes...but, thats what we chose to do after having many of our friends and other extended family members co-sign for their kids and get stuck with the bills after their darling children either dropped out or failed and decided it wasnt for them.

Every situation is different - I dont fault any parent for co-signing for their child's college education, however we chose not to as that was the best choice for us (and our daughter). We help in other ways with her education

[woeisme]

I'm not questioning or faulting your decision (I also won't co-sign any loans for my son to go to college) I was just explaining that it's very hard for a student to get a loan in his/her own name if the parent's won't apply for a parent's loan first, so while it might have worked for your daughter, suzychapstk isn't being given wrong info by her college, her kid is going to have a very hard time getting a loan to cover her costs. I hope they take the CH 13 paperwork as proof that they can't do a parent loan so she can qualify for the additional funds. I really wouldn't advocate anyone co-signing loans for someone else, the way the whole student loan industry is set up to try to force parents into these things is crazy, imo.