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Help with Student Loans

caffeinatedchaoscaffeinatedchaos 0 replies1 threads New Member
Hi,
I'm a rising college freshman and totally overwhelmed by student loans. If anyone can give me a step-by-step guide to the process, I would really appreciate it.
Thank you!
6 replies
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Replies to: Help with Student Loans

  • SybyllaSybylla 4946 replies59 threads Senior Member
    edited May 27
    Start by telling us what your cost of attendance is going to be, what is the gap you need covered by loans, and how the adults are helping.
    The only loans you alone can take out are the direct/stafford loans (you can google that). The reality is you are not overwhelmed by student loans because you only have one option. Other loans involve parents or guarantors.
    edited May 27
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  • cptofthehousecptofthehouse 30405 replies59 threads Senior Member
    Currently , the only loans offered by the federal government to dependent undergraduates is the Direct Student Loans. For freshmen in that category, the maximum amount is $5500. Up to $3500 of it can be subsidized (no interest while in school). The amounts available go up to $7500 under this program for junior and senior years.

    There are sometimes additional loans available to students only offered by states and individual schools. Far more often, however, this is the most you can borrow without an adult, generally the parents co-signing. IMO, it is preferable in such cases, for parents to take out the loan themselves through the PLUS program rather than hamstringing both student and parent to the joint loans. PLUS has some features such as forgiveness programs, cancellation upon death, Flexible repayment that a lot of the joint student/parent co-signed Loans do not.

    Parents and students really should carefully research the implications of taking on debt for college. The Direct Student Loan amounts are common among students , but when one starts having parents commit to repayments of large amounts, it can threaten their credit, quality of life, financial situation and retirement.

    We took out large amounts of PLUS to pay for one of our kids, and stated paying it back immediately after we got the money. It was a very long 14-15 years of repayment and we were not in our old age yet, still were fully employed, in good health. We borrowed each year for 4 years and each loan disbursement had a payback period of 10 years, the way we set it up. Even though we fully researched, considered, planned and budgeted for this outlay, it was very painful.

    Our student did not make the type of money in those years to be able to repay that kind of money. Had we co-signed with the expectation he would repay that amount, we would have been disappointed. At least, we were able to make those repayments, something very important to consider when taking out that kind of loan.

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  • Erin's DadErin's Dad 34121 replies4850 threads Super Moderator
    You generally go through your college financial aid office to get your $5500 Gov't Student Loan. They will have that process mapped out for you. As far as what the other posters have stated, be very wary of taking out any additional loans.
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  • BelknapPointBelknapPoint 4958 replies19 threads Senior Member
    Start here:

    https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized

    Go through the whole website and come back here if you have any unanswered questions.
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  • kelsmomkelsmom 16091 replies99 threads Senior Member
    Federal loans will be offered by and accepted through your school. For a dependent student, you are limited to a total of $5,500 in federal loans for freshman year. Your school will have a process for accepting the loans; make sure you follow it. It will involve confirming that you want all or part of the loan, completing entrance counseling & signing a Master Promissory Note. Your school’s financial aid office should have the process posted online and/or will email you instructions.
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  • DadTwoGirlsDadTwoGirls 6551 replies1 threads Senior Member
    Have you already decided where you will be attending? If so, what is the cost of attendance and how much can your parents afford to pay?

    Most students in the US have to take the cost of attendance as a major factor in deciding where to attend.
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