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Thread: student loans and bad credit

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    Default student loans and bad credit

    I've noticed a couple of posts from members saying how they can't get a student loan because they have bad credit. This is completely opposite of what I've experienced. When I first started school I had a bankruptcy, car repo, delinquent accounts and accounts in collections. I had no problem getting student loans.

    I always thought that ANYBODY could get a student loan (provided they were accepted for enrollment at a school)

    Are these people misinformed? Or has something changed in the last couple years?


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    God/dess Emily's Avatar
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    Default Re:student loans and bad credit

    that's what I thought too, saph

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    Default Re:student loans and bad credit

    Seriously, that's the way it is. You can have the most jacked up credit in the world, you can still get a student loan. Of course, keep in mind student loans are not forgiveable through bankruptcy. But there are such things as loan forgiveness programs when you're ready to pay them off.

    I just couldn't understand why some people seem to have even an inkling of desire to go to school, yet say they can't afford it and don't qualify for a student loan.

    Apply to schools, get accepted, go to the Financial Aid Office, complete a FAFSA and tell Financial Aid you're interested in student loans (if you are in fact interested in student loans).

    Even with my crappy credit history, my interest was deferred. I'd like to hear from somebody who was accepted and enrolled in college, applied for loans thru financial aid and was denied. I've honestly never heard of it.

    Correct me if I'm wrong peoples...


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    God/dess Lexi's Avatar
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    Default Re:student loans and bad credit

    Thats what I believe. They give student loans to anyone who is enrolled in school. I remember getting my loans with no problems.

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    Default Re:student loans and bad credit

    I think it's what ms george said, when they say they don't 'qualify' for student aid, it's because they are dependents and it's going by their parents income. Most people who get student loans are 18-20 year olds who most likely don't have credit at all (or even a job sometimes), but they can still get a loan.

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    God/dess Lexi's Avatar
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    Default Re:student loans and bad credit

    I dont qualify for student aid, like grants and what not because I am still considered dependant. Such BS. I live on my own and pay my own bills, etc... But its not about that. Its about the 6 questions that ask on one part of the form. "Are you married, do you have kids, are you a veteran, are you 25?" etc...
    But I did get student loans. I just didnt get enough aid, as ms george said.

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    Default Re:student loans and bad credit

    Gov't backed student loans are granted on the basis of eligibility, as Sapphire originally said, and do NOT take the credit risk of the student into consideration. As Lexi points out, the major factor controlling the amount of money the student will be eligible for is "total household income", where the eligible loan amount drops as the "total household income" rises. Therefore if the student is still legally considered a dependent of the parents, then the "total household income" also includes the parents' incomes which may push the student out of the income range which is eligible. If the student is "emancipated" then only the student's income is counted and eligible benefits will be much higher. However, being "emancipated" also costs the parents a tax deduction and causes a significant increase in income taxes the parents must pay, which may or may not involve more money than the "emancipated" student's benefits.

    However, student loans from private lending institutions can and do consider credit risk. But local banks etc. are obligated by law to provide X dollars worth of student loans to students who live in their local community, meaning that the credit risk the bank must accept on student loans is usually a lot higher than it would be willing to accept for a car loan or mortgage.

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    Veteran Member francesca's Avatar
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    Default Re:student loans and bad credit

    There are student loans you can apply for from private lending institutions that ARE based on credit worthiness. These carry a higher interest rate than government guaranteed loans (guaranteed loans mean that if you default on the loan the government will still pay off the lending institution but you will be in default and they can collect on what you owe them by any means - including keeping your income tax return, etc. and you will be unable to receive any further financial aid until you get out of default).

    To get a private loan, you must have good credit and usually you must have a cosigner who has a job, who will pay back the loan in case you are unable to. You go to a bank, not to your financial aid department to apply for this type of loan.

    These are usually only necessary if:

    A) you are considered to be dependent on your parents and therefore don't qualify for aid because your parents make too much money (i.e. you are under 24, are not married, and have no children - if you are over 24, or under 24 but you are married and/or have a child, you are considered to be independent, and qualify for all aid available if you are in financial need).

    B) If you need to borrow more than the maximum allowable through the government in a given year (i.e. if your maximum is $6,000 a year and you need $10,000 to pay for your tuition and/or living expenses, you could borrow the other $4,000 through a private loan).

    I have one loan like this and I regret it BIG TIME. One year I needed extra money in excess of my school's maximum and I got a private loan...my parents cosigned for me and I am paying out the ass for it right now. All my government student loans are still in deferment and much easier to manage in terms of payments and flexibility. (There are ways to get more than your school's quoted maximum of government backed loans.)

    You can have crap credit and be bankrupt and destitute and still get a student loan through your school, as long as you are in good academic standing (not suspended, maintain a C average). In fact, the more money you make, the less you will qualify for to borrow. The only other reason you can get turned down for a government loan is if you are in default on a previous student loan. You can get out of default by consolidating loans (as long as you owe a minimum of something like $8,000), which after a waiting period of around 6 months you can get out of default. It is a major pain in the ass and not an easy or fast process.

    Be sure to keep track of where your loans are from because if you move and happen to lose track of one, you can slip into default just by way of them not knowing how to contact you.

    If you can prove a financial need, you can borrow the maximum amount through the government and also you can get grants which DO NOT ever have to be paid back. Most grants are only available for undergraduate students (i.e. Pell grants.) I was shocked when I first applied for financial aid and they just GAVE me money and said I never had to pay it back. It was the easiest thing ever. It really makes it easier to go to college.

    You will eventually have to choose a program of study while receiving financial aid but you are not committed to stick with it. You can change it later if you want.
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    Default Re:student loans and bad credit

    Quote Originally Posted by francesca link=board=6;threadid=7075;start=msg82573#msg82573 date=1078840891
    you can get grants which DO NOT ever have to be paid back. Most grants are only available for undergraduate students (i.e. Pell grants.) I was shocked when I first applied for financial aid and they just GAVE me money and said I never had to pay it back. It was the easiest thing ever. It really makes it easier to go to college.
    Grants are awesome. Stipends are lovely as well but a bit harder to come by.


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    Default Re:student loans and bad credit

    If a person's parents make to much money they may not qualify. If you have a kid you are an independent. An independent can get anything.

    Or they didn't fill out the FASFA correctly.

    It may be that a person who can't get loans screwed up in the past with a school. They will not give loans to people who fail out or fail to pay.
    Those who bring sunshine into lives of others, cannot keep it from themselves.

  11. #11
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    Default Re:student loans and bad credit

    yea.. unfortunately i fall under the category of parents who make over a certain income... and at the same time, parents who dont believe in "paving" a suitable path for my education.
    besides, they say if i do it on my own, ill appreciate it more..
    BULLSHIT. id rather them not CLAIM me as a dependant so its EASIER to do it on my own.. HOWEVER I NEED HEALTHCARE!

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    Default Re:student loans and bad credit

    I know Lexi asked about being dependant on parents still...you can ask your college for a form to be declared "independant" regardless of the guidelines. I was 20 when I was declared an independant student, and all I had to do was fill out the paperwork, and present them with my lease agreement, bills in my name, etc. to prove I was living on my own. I had been out of my parent's house since I was 18, and found it ridiculous that I didn't qualify for things, as they hadn't claimed me on taxes or paid for anything since I moved.

    Try this...

    Chandler

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    Default Re:student loans and bad credit

    I applied for a student loan and couldn't get it because I was 24, and they said that my parents made too much money. So, I had to get a private loan to pay for some of that...

    Your "legally" independant at 21, but that doesn't help when you're 24, living on your own for 4 years and trying to get a student loan...

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    Senior Member missmolly's Avatar
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    Default Re:student loans and bad credit

    No matter what you are eligible for certain student loans ( the stafford loan) but that can only cover about 2000$ of your tuition so you might have a problem like I did. My tuition is 17000 a year. If you haven't had the same job for 2+ years and good credit good luck getting a student loan without a co-signer. I have a brand new car in my name, paying on it for a year ,and they still wouldn't give me a loan. Thank god I have a cool sister who co signed this year.
    But if you can't find a co signer or even if you do, fill out a FAFSA! Trust me your school wants to help you because they want the money. AMS services also has a tuition payment plan most schools accept.
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